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 "Wal-Mart
Losing Public Support, 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% — below 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 —
which survived a veto by that state's governor — and 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 non-emergency 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%."
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Comments by Paul Engler and Clayton Perry
Wal-Mart has been closely watched by many corporate
leaders that see it as a model for the new Economy: rapid growth,
poverty wages, few health benefits, no unions, race and gender
discrimination, and the destruction of small family businesses. In a
surprising turn of events, Wal-Mart is starting to feel the pressure.
Robert Greenwald’s incredibly well produced documentary combined with an
innovative grass-roots campaign by Wake up Wal-Mart and Wal-Mart Watch,
has produced a groundswell of activity. For example, there were 7,000
screenings in churches, private homes, union halls and other locations
for the documentary. This in addition to a well publicized defeat
for a large local expansion plan in Inglewood, by our sponsoring
organization CLUE, and LAANE.
Months later a pioneer health care bill was passed
in Maryland, which requires Wal-Mart to pay larger percentage of their
employees health benefits. Studied showed that this would save state
taxpayers millions, by removing some Wal-Mart employees from state
welfare programs.
Similar proposals came up state houses across the
country as far south as Florida and as far west as California.
Wal-Mart is just trying to respond and restrategize their losing public relations strategy, by pumping millions
into TV advertising, and creating their own documentary called “Why
Wal-Mart Works, And Why That Drives Some People Crazy.” These efforts
have confused many consumers but Wal-Mart’s momentum is faltering.
The poll showed that a majority, 58 percent, viewed Wal-Mart favorably,
but the figure was down from 76 percent in January. Wal-mart also
lost its number one spot as most admired company.
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