By Fortune / Phil Wahba
October 7, 2014

Wal-Mart Stores WMT -0.03% is cutting health care benefits for many of its part-time workers, and making other employees pay a bigger share of their premiums.

The world’s largest retailer — citing rising health care costs as well as practices at rivals Target TGT -0.88% and Home Depot HD -0.26% — said it would no longer provide health benefits to employees who work fewer than 30 hours a week, a move that will affect some 2% of its U.S. workforce, or 26,000 people. Two years ago, the retailer stopped providing health benefits to newly-hired part-time workers, according to the Wall Street Journal. Employees who are covered will have to pay more for the benefit: its most popular and lowest cost associate-only plan will increase by $3.50 to $21.90 per pay period, a 19% jump.

“Like every company, Walmart continues to face rising health care costs. This year, the expenses were significant and led us to make some tough decisions as we begin our annual enrollment,” Sally Welborn, senior vice president of global benefits, wrote in a blog post.

In August, Walmart’s U.S. CEO Greg Foran warned investors that “pressure from health care” costs, as more employees enrolled in its health care plans than expected, would increase by $500 million this fiscal year.

“We don’t make these decisions lightly, and the fact remains that our plans exceed those of our peers in the retail industry,” Welcorn continued in her post. She said Wal-Mart covers more than 60% of U.S. associates’ total health care costs and more than 75% of their premium costs. That was better than the retail industry average of 54% of total health care costs and 68% of employee premiums, she said, citing data compiled by human resources consultancy Aon Hewitt.

This article originally appeared on Fortune.com

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