October 8, 2003
Company saves by covering catastrophic care but shifting significant costs to employees
Source(s): Bernard Wysocki Jr. and Ann Zimmerman, Wall Street Journal (Sept. 30)
Cut-rate retailer Wal-Mart, the nation’s biggest private employer, offers its employees
a cut-rate health coverage policy that "could carry enormous influence" with other
employers trying to curtail soaring health care costs, reports the Wall Street Journal.
However, the United Food and Commercial Workers Union
complains that the company’s plan "discourages workers from signing up for coverage at
all," and has made health benefits the "centerpiece of its drive" to unionize Wal-Mart
workers.
Wal-Mart spent an average of $3,500 per employee on health benefits last year, which
was almost 40 percent less than the average for all U.S. corporations, according to
Mercer Human Resources Consulting. Wal-Mart’s
philosophy is that it should pay for catastrophic health expenses like cancer therapy
and organ transplants that "could financially ruin an employee," according to the
Journal. It has no lifetime caps on coverage, a benefit offered by only 47
percent of employers. It also allows part-time workers to join the plan after two years.
The company keeps premiums down, however, by "shifting routine-care costs to employees."
Also, new employees must wait six months to sign up for benefits; coverage of
many pre-existing conditions does not kick in for a year; retirees are not covered;
deductibles of up to $1,000 are triple the norm; and flu shots, eye exams, childhood
vaccinations and other treatments are not covered. About 60 percent of Wal-Mart’s
800,000 eligible employees have signed up for coverage, compared with 72 percent for
the entire retail industry, according to a survey from the Kaiser Family Foundation.
This article is from CoverTheUninsuredWeek.org, a
project of the Robert Wood Johnson Foundation. Copyright © 2003 The Robert Wood Johnson Foundation All Rights Reserved.
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