Wal-Mart Broadens Health Benefits, To Trim Down Drug Co-Pay

April 18, 2006 (PLANSPONSOR.com) - An effort to quell the onslaught of recent criticism over its health care offerings, Wal-Mart, Inc. agreed this week to ease eligibility requirements for its part-time employees who want health insurance and plans to reduce employee co-payments for certain prescription drugs from $10 to $3.

Until now, the employees have had to work for Wal-Mart for two years to qualify for employer-sponsored insurance. Beginning next month, they will have to work at the company for one year in order to qualify for health insurance, with the coverage extending to their children.

The announcement by nation’s biggest employer could put an end to union and lawmaker objections that Wal-Mart’s refusal to relax the requirements forced low-income, part-time employees to lean on state funding, with a public scolding by Wisconsin Governor Jim Doyle (see Doyle Accuses Wal-Mart of Health Care ‘Dumping’ ).

It is, however, still unclear how legislation such as Maryland’s decision in January to require companies with at least 10,000 employees to put at least 8% of its payroll toward health care (see Veto of ‘Wal-Mart Bill’ Overridden in MD Senate ), will actually affect the number of those dependent on state health care systems (see Picking Up the Tab).

The Maryland decision led to other states following suit with similar bills, with one bill faltering in New Hampshire (see Wal-Mart Bill Collapses In New Hampshire House Vote) and another bill still pending in Kentucky (see Kentucky Moves Closer To Adopting ‘Wal-Mart Bill’).

Even though much of the recent criticism has been targeted at Wal-Mart, the push for employers to be more publicly accountable has trickled down to smaller businesses in some instances, with a New Jersey Senate bill that singles out employers with 50 or more employees or worker dependents enrolled in the state’s low-income health insurance program to report these numbers annually (see NJ Bill Calls for Report of Uninsured Workers on State Plan ).

The announcement by one of the company’s vice presidents, Susan Chambers, said that Wal-Mart is now picking up about 70% of the costs for each employee’s health care, and expects that percentage to increase. Chambers said the version of the health plan that the company expected most employees to sign up for would be available for $23 a month and workers’ children would be included for $15 more.

However, the coverage also calls for a deductible that requires the worker to pick up the first $1,000 in medical expenses, and the deductible rises to a maximum of $3,000 for families.

Chambers also announced that the company would expand in January the list of generic drugs available at $3 a prescription. It would enhance contributions to health savings accounts, and it would provide workers with a 10% discount on fresh fruits, vegetables and other healthy foods.

Chambers contended that its health insurance costs have risen 19% each year for the past three years.