Apple Skips Debate, Commits to Health Insurance

October 26, 2009

In the midst of a heated national debate over legislation to provide all Americans with affordable health insurance, Apple will skip the controversy entirely and extend full-benefit medical insurance to part-time employees in January 2010. According to sources, the benefits now offered only to full-time employees, including those who work at the retail stores, will be offered to those working as few as 15 hours a week, which would include nearly all store employees. The insurance benefit will apply to employees who have at least one year of service with Apple. The change in coverage is significant, since American businesses have traditionally offered medical and other benefits only to full-time employees, and sometimes reduced benefits to those who work at least 20-hours a week. Apple has 16,500 full-time equivalent retail store employees, according to the company’s latest financial filing. It’s estimated the staff is composed of about 9,900 part-time employees who will be affected by the insurance change. Based on the average cost of medical insurance policies purchased by employers, the annual cost of extending medical benefits to part-time store employees could be at least $80 million a year.

According to the sources, the improved medical benefit sprang from significant dissatisfaction that emerged over the past year among part-time company employees. The input led to a company survey of the employees, intended to identify possible areas for improvement. A recurring topic of the feedback was improved benefits, and medical insurance in particular.

The sources say Apple now pays up to 65 percent of an employee’s health care insurance, with the employee paying the remainder. That pay-out will reportedly also apply to the part-time employees insurance coverage. That figure compares to an nationwide average of 73 percent, according to the 2009 Kaiser Family Foundation’s Employer Benefits Survey.

Apple’s insurance includes plans for individuals, spouse, domestic or same-sex partner.

The real cost of corporate-provided medical insurance has been hotly debated, especially during last year’s presidential election. In this case, the actual cost to Apple for an employee’s medical coverage is unknown. However, according to industry association surveys and employee advocate groups, the cost for companies to provide medical insurance ranges from $3,600 a year to over $12,000. Both figures are likely too extreme, with the actual cost somewhere in between. A commonly-accepted compromise figure is $8,000.

The estimated $80 million cost of the health insurance is balanced against the stores’ spectacular fiscal 2009 performance—$6.5 billion in revenues and $1.4 billion in profits. At that rate, the insurance cost would represent just one percent of revenues or less than six percent of profits.

An insurance industry grade group has posted their latest health insurance figures (pdf).

 

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{ 15 comments… read them below or add one }

Mac Guy October 26, 2009 at 0625

So if you work fewer than 15 hours, you don’t get any health insurance? Surely, those people would need it covered the most.

What happens if you get sick in your first year of working for Apple? No job, no money, no coverage?

Of course, Apple Store employees in Canada and the UK have 100% medical insurance coverage, regardless of their hours or length of time with the company.

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Jose October 26, 2009 at 0650

It’s important to note that the cost of providing insurance to employees is tax deductible to the company. However, one of the ideas circulating right now is to either remove or reduce the tax credit to companies providing insurance in order to pay for universal health care. Good for Apple to step up to the plate and do the right thing for ALL their employees. They are the public face of the company and drive sales.

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Another Mac Guy October 26, 2009 at 0821

Mac Guy,

Anybody working fewer than 15 hours in non-commission retail is clearly not making their living at it, it’s likely second job. Also, they are the least committed of the workforce, least practiced, and most likely to not show up for shifts.

Providing the benefits for those people would just be foolish and Apple would have a workforce made up of those only working there one day per week in order to receive benefits. Not what you want to encourage as the face of your company.

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Tom October 26, 2009 at 0837

I feel soo lucky to live in the UK :-)

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Mac Guy October 26, 2009 at 0859

Another Mac Guy,

So why do part-time employees in Apple Store employees in Canada and the UK bother to show up for work if their employer doesn’t have the stick of health care to lord over them?

Really, playing with people’s lives like that for commercial gain horrifies me.

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Joe October 26, 2009 at 0924

“Another Mac Guy,

So why do part-time employees in Apple Store employees in Canada and the UK bother to show up for work if their employer doesn’t have the stick of health care to lord over them?

Really, playing with people’s lives like that for commercial gain horrifies me.

Mac Guy”

Huh?

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Marcus October 26, 2009 at 1011

Ah, the ironies of my life. I just spent about a month pressuring my Apple Store managers to move me to full time, which they finally did. I really didn’t need the extra hours or the other benefits, what I really needed was health coverage. I would have qualified for this in an instant because I have over a year residency at Apple, and I work well over 15 hours a week.

I am pleased to hear this though, as it’s good news for all my coworkers and the company in general.

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Ron October 26, 2009 at 1047
Dan October 26, 2009 at 1209

Apple does not provide its part time Canadian retail employees with health care. In canada health care is provided by the government and it covers things such as doctor visits, EMS, and various surgeries that are deemed medically necessary. It does not cover prescriptions, dental or eye care and a variety of specialists. In canada there are extended health plans that are offered by private insurers that cover prescriptions, dental and eye care and covers the cost to see certain specialists. Apple offers EXTENDED health insurance coverage ONLY for their full time employees in Canada.

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El Wozo October 27, 2009 at 0956

Both Mac guys,

From the sounds of it, the health care options for both part time AND full time employees are opt-in. Many of the part timers are college kids who don’t need/want insurance (why spend the beer money when mom and dad or BlueCross have cheap insurance for you already?), and others are retirees, self employeed, or house-spouses who want to have fun in WIlly Wonka’s Computer Factory. Sadly, though, in this economy, what used to be a “second job” can very quickly become an “only job.” I know 3 teachers who work weekends and some evenings at two different Apple Stores in a state that is likely going to be shuttering lots of schools. One of those guys just had a baby. When the local grocery chain gives ALL their employees health benefits, why can’t a multinational corp with $35Billion in the bank at least offer to help some of their parttimers with realworld needs?

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Guest October 27, 2009 at 1149

This has not been announced internally, but I don’t doubt that this issue was raised quite a bit in the last survey. I know many people would take advantage of this offering.

Also notable is how the Mac web is reporting this news and attributing heavily to this single article. Is ifo even news or is it just like Fox Noise?

As for part time being a “second job” or workers not being “committed” if they’d only schedule the hours, they’d be more than thrilled to work. Instead they keep bringing on new people and screwing over the existing employees.

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guest October 28, 2009 at 1003

That’s nice. But lack of health insurance is not the core reason why the employees are “dissatisfied”.

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Marktrek October 28, 2009 at 2029

China will have full healthcare for all of their citizens in a year. Iraq has in their new constitution that everyone will have the right to healthcare.

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Guest October 28, 2009 at 2130

The announcement came this morning from Ron Johnson. I don’t know what else we would be dissatisfied about, but this indeed makes me very satisfied.

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Smart Mac Guy October 30, 2009 at 0706

So apparently Mac Guy’s an idiot. If there’s universal healthcare in a country you wouldn’t need it at work anyway. Oh, I forgot. Your universal healthcare sucks.

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