Wal-Mart Unveils Employee Health Coverage Improvements

February 23, 2005 (PLANSPONSOR.com) - Retailing giant Wal-Mart plans to expand the availability of its lowest cost employee health care plan and shorten eligibility periods.

Word of the move by the nation’s largest private employer comes after months of intense pressure around the country to improve its workplace health plan amid charges that state welfare health plans wind up picking up the slack for Wal-Mart employees’ coverage gaps, the Associated Press reported.

Wal-Mart Chief Executive Lee Scott said new steps would include expanding the $11 monthly premium to make it available to half of all US employees by next year and shortening eligibility periods for part-time workers and their children from 24 months. Wal-Mart is still deciding what the new wait will be, a company spokeswoman said.

This isn’t the first time the company has reacted to the sometimes extreme public pressure on the health care issue. Wal-Mart last fall offered new lower-premium insurance aimed at getting more of its work force on company plans. The company said premiums of $23 a month – and as low as $11 in a select number of locations with special deals with medical providers – helped get 70,000 workers enrolled in Wal-Mart plans for the first time. Wal-Mart had 615,000 employees enrolled in company health plans of January versus 568,000 a year earlier, Wal-Mart spokeswoman Sarah Clark said. It has 1.3 million US employees.

According to a Wal-Mart press release , Scott will also announce that the company will contract with outside firms to build and operate more than 50 new health clinics in Wal-Mart stores nationwide this year alone. Currently, Wal-Mart has a total of nine pilot clinics in stores in Arkansas, Oklahoma, Florida and Indiana.

On the other hand, “The soaring cost of health care in America cannot be sustained over the long term by any business that offers health benefits to its employees,” Scott said in a statement released ahead of Sunday’s speech to the National Governors Association.

Scott is also expected to renewed Wal-Mart’s criticism of bills filed in at least 22 states that would force the retailer to spend more on health care. Maryland has become the first state in the nation to require Wal-Mart to spend more on employee health care or pay the difference into the state’s Medicaid fund (See Veto of ‘Wal-Mart Bill’ Overridden in MD Senate ). The Retail Industry Leaders Association has challenged the law in court (See Lawsuit Filed Challenging Recent Health Care Mandates ).

Wal-Mart notes that Scott’s remarks “…come on the heels of nine states delivering setbacks to legislation similar to the type of employer mandate the Maryland General Assembly made law in January.”