Target dropping part-time workers from health care plan

Are more companies to follow?


This is a rush transcript from "Your World," January 22, 2014. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: A health care law that's got us sick and a recovery that's got many of us wishing we were stoned, but, attention shoppers, all that is about to change. Unfortunately, for the worse.

Eh? Welcome, everyone. I'm Neil Cavuto.

And why should Target shoppers have all the fun? Now Target workers are feeling sick, at least most of Target's part-time workers, the company just yanking their health care coverage, apparently because the new health care law just makes it so damn expensive.

Target is just the latest to do this.

Business titan John Paul DeJoria says it will not be the last.

John Paul, good to have you back.

The company argues that providing benefits for part-time workers just is not worth it and it's gotten too costly to do. So these guys are on to the exchange. What do you make of this?

JOHN PAUL DEJORIA, CO-FOUNDER, PATRON SPIRITS COMPANY: You know, I just had a conversation with John Capra (ph) recently that showed me a different side about what's going on right now that people just should have their eyes open to.

Example, if you live in states like California, New York, or many, many other states, where your state tax is 13 percent, 14 percent off whatever you make over $250,000, if you make more than that, if you take that and are increased from 35 percent to over 39 percent, and then you add on top of it ObamaCare, more than half the year for people where the American dream came true, they're paying that to the government.

Now, as John so well points out -- and I agree -- everyone that really needs, that really needs health care, and not just wants to sponge or be a freeloader, deserves to get in our great nation, or give them food, if they really need it. But so many are going on.

More and more businesspeople today, small businesses with over 12 people that ObamaCare affects, people that are making more money are saying, "Well, wait a minute, if they raised our taxes to almost 40 percent, with ObamaCare 44 percent, and then with state taxes, more than half the year we're working for free, what's wrong with the government? When they went from 35 percent to 39-plus, why couldn't that handle it all?"

Now, what are they doing in retaliation? It's not retaliation, but what are they doing to offset if? And John said this -- "I'm delaying" -- even though is on an upswing, it's a slow upswing, by the way, a very slow way.

"Instead of me getting another car every four, five years, J.P., I'm going an extra year. Yes, I make more than $250,000. My American dream came true for me, but I'm offsetting it in different ways." And businesspeople, they speak, say, "Well, wait a minute, this doesn't work out."

And here's something people don't realize. When ObamaCare came into effect, that extra 3-plus percent not only went to everyone's taxes. It went to capital gains.


CAVUTO: But the irony is, John -- here's the irony, that for those who are nowhere near that income threshold, they're getting screwed here, because for these companies and businesses that were providing benefits for part-time workers, which is something they didn't have to do, it was a real...

DEJORIA: That's right.

CAVUTO: ... a prime benny, they're saying now it's just too cost- prohibitive, that the -- the coverage they have to provide...

DEJORIA: Oh, but it is. But it is.

CAVUTO: ... just it made it too prohibitive.

Now, the flip side is that these people haven't lost coverage. They're going to gain coverage under the new system. It probably won't be quite the same and it will probably be more expensive. So the argument you will hear from the administration is, then they have got nothing to complain about.

But the reality is that companies that wanted to take this on their own and help workers out will be increasingly forced to just give it up, right?

DEJORIA: That is correct.

And, by the way, it does have an effect on everybody. And, again, my conversation with John, he really pointed this out. He said, J.P., when we start cutting back on anything, even though we do so, we're a little delayed doing it, it affects everybody down, because people with regular jobs that have normal jobs, maybe their business isn't as good as it should be, so not as many as could be working are working.

When people start cutting back on benefits, they're also cutting back on the amount of jobs that are available full-time. So when you go to full-time to part-time, that affects everybody, so the company could exist.

Now, you can't really blame the companies in a big way, because they have got to look also at the people that invested money in their business. They're not paying 15 percent on dividends. They're paying 20, almost 24 percent on dividends now.


CAVUTO: But your argument is that we're going to see more of this, more companies will do the Target thing, it's just a dollar amount?


DEJORIA: Yes. Yes. Unfortunately, we will.


DEJORIA: Yes. Unfortunately, we will.

But there's an answer. The answer is, if these guys could get together and just kind of adjust it a little bit and make something that works for all of America, everybody benefits.

CAVUTO: Well, they're -- they're not doing that.


DEJORIA: They ought to go back in do it. I know they're not. They have got to go back in do it.

CAVUTO: No, they're not.

But, John Paul, very good points all. They're just not doing it.

John Paul DeJoria, thank you, my friend.


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