Disney To End Health Coverage For Thousands Of Employees’ Spouses

Earlier this month, Disney reported quarterly revenue of $25.25 billion and operating income of $5.6 billion, increases of 7% and 21%, respectively.

So, of course, starting in 2027, the company’s employees will no longer be able to enroll their spouses in company health insurance plans if those spouses have access to coverage through their own employers. Notably, the change applies even when the alternative coverage offers substantially worse benefits.

According to Puck, which broke the news, more than 200,000 Disney employees were notified of the change, which could remove thousands of spouses from the company’s plans. Lower-paid and hourly employees are likely to be the hardest hit, particularly if switching to a spouse’s employer-provided insurance brings higher premiums, deductibles, or out-of-pocket costs.

The restriction is one of several changes being made to Disney’s ironically named “Total Rewards” program, which covers employee compensation and benefits. In an internal communication cited by Puck, the company attributed the decision to “rising healthcare costs, evolving employee needs, and shifts across our industry.”

The benefit cuts arrive early in new CEO Josh D’Amaro’s tenure and shortly after Disney staged a lavish D23 presentation to pimp its upcoming projects, titles, park additions, and merchandising plans. Behind the lights and effects, the company has spent much of this year reducing its workforce and trimming costs.

Disney has already carried out three rounds of layoffs this year, including cuts at Pixar, where it dismissed about 150 employees in July. Those reductions came despite a strong box-office year for the animation studio, which has several other major IP returns coming up that seem like almost surefire profit machines.

The company also added another $1 billion to its stock-buyback plans, bringing the annual total to at least $9 billion. Stock buybacks reduce the number of Disney shares on the market, potentially increasing the value of those still held by investors. The company is therefore committing billions to supporting shareholder value while reducing healthcare benefits for employees and their families.

Surely employees whose families are losing their coverage will take solace in the fact that investor portfolios are thriving.