http://www.latimes.com/business/la-fi-walmart24feb24,0,5148631.story?track=tottext
From the Los Angeles Times
Wal-Mart Says It Will Boost Health Benefits
By Abigail Goldman
Times
Staff Writer
February 24, 2006
Wal-Mart Stores Inc., under
pressure to shoulder more of its workers' healthcare costs, outlined plans
Thursday to improve its benefit offerings, including opening more clinics in
stores and shortening the period that part-time employees have to wait before
they can buy coverage.
The world's largest retailer also said it would
expand its cheapest health insurance option, an $11-a-month plan that has been
offered in selected areas. The "value plan," which costs about $20 for families
and allows three doctor visits and three prescriptions before a $1,000
deductible kicks in, will be offered to half of the company's employees,
Wal-Mart said.
The proposals are in a speech that Wal-Mart's chief
executive is scheduled to deliver Sunday. They follow promises the company made
last year to bring healthcare within reach of all its nearly 1.4 million U.S.
employees.
Over the last several months, Wal-Mart has come under
increasing criticism for what opponents call stingy health benefits. The company
released highlights of the CEO's speech the same day a union-backed group issued
a report claiming that U.S. taxpayers spent $1.5 billion last year providing
medical care for uninsured Wal-Mart workers.
Wal-Mart said the five-page
report was a publicity stunt based on poor methodology.
The company said
the number of employees covered by its health plans increased slightly last year
to 46% Ebelow the national average of 60%. It said almost one-third of its
workers get health insurance elsewhere, which critics say is evidence that the
retailer relies on state programs and other companies to cover its
workers.
At a time when expansion is crucial to the company's future
growth, especially along the East and West coasts, the attacks against Wal-Mart
are taking a toll, at least in terms of public opinion.
In Fortune
magazine's 2006 list of America's most admired companies, released this week,
Wal-Mart fell eight spots to No. 12. The Bentonville, Ark., retailer, which has
more than 3,850 U.S. stores and nearly 2,300 international locations, held the
top spot on the list in 2003 and 2004.
The speech by CEO H. Lee Scott Jr.
at a National Governors Assn. meeting in Washington is aimed at an audience
playing a key role in the company's latest healthcare battle: state-by-state
efforts to force Wal-Mart to pay more of its workers' medical costs.
In
California, state Sen. Carole Migden (D-San Francisco) introduced a bill
Wednesday that would require companies that employ 10,000 or more state
residents to spend at least 8% of their total payroll on health benefits or make
payments into a state fund for the uninsured.
"Wal-Mart's commitment is
not enough and is hardly affordable to their hardworking employees," Migden said
in a statement Thursday. She said Wal-Mart's 70,000 California employees average
about $15,000 in annual pay, and even under the company's coverage proposals,
workers would be charged monthly premiums and large deductibles.
Migden's
bill is based on legislation passed last year in Maryland Ewhich survived a
veto by that state's governor Eand introduced in several other states.
In his speech Sunday, Scott is expected to denounce those efforts and
call on government to work with business on healthcare issues, the company
said.
He also will announce that for the first time, part-time employees
will be able to buy health insurance for their children, the company said.
Part-time Wal-Mart workers now wait two years before being eligible for
individual health coverage. The company said it had not yet decided what the
shortened waiting period would be.
The company said Scott also would
outline plans to expand a pilot program of nine in-store health clinics to 50
sites. Those clinics, the company said, offer nonemergency care to employees and
members of the community, many of whom might otherwise go to a hospital
emergency room for routine ailments.
In October, Scott had said he wanted
to make affordable healthcare coverage available to all U.S. employees of the
company, which this week reported annual profit of $11.2 billion on $312 billion
in sales.
A company memo leaked just after Scott's pledge outlined stark
recommendations for reining in healthcare costs, such as making jobs more
physically rigorous to discourage unhealthy workers and using more part-time
workers.
The memo also recommended boosting the company's image by
touting initiatives such as the ones Scott plans to highlight
Sunday.
Wal-Mart has said that the memo was a preliminary document and
not a final list of proposals.
But critics said Scott's planned speech
this weekend appeared to take its cue from the memo, which suggested "reframing"
the issue of uninsured workers as a societal problem as well as engaging in a
"sustained communication campaign" about the company's healthcare
offerings.
In its report Thursday, Wake Up Wal-Mart, the union-backed
group critical of the company, projected that American taxpayers would pay $9.1
billion in healthcare costs for Wal-Mart employees by 2010.
The group
based the figure on the number of Wal-Mart employees now using Medicaid and
projections for the company's growth.
Wal-Mart disputed the report. "The
fact is, Wal-Mart jobs move people from public health programs onto private
insurance," said company spokeswoman Sarah Clark.
"Seven percent of
associates join Wal-Mart already on Medicaid. Within two years, that number
drops to 3%."