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Wal-Martization of Health Care

Wal-Mart’s health care coverage is well below the national average

High premiums and deductibles keep well over half of Wal-Mart workers from participating in the company health plan. While the national average of workers covered by employer health insurance is about 60 percent, only about 43 percent of Wal-Mart’s employees are covered by the company’s health care plan.
Wal-Mart also covers less healthcare costs than its competitors. In a state analysis, the Massachusetts Department of Health and Human Services found that in 2003, Wal-Mart covered only 52% of total health care premium costs compared to K-Mart which covered 66%, Target which covered 68%, and Sears which covered 80%

Majority of Wal-Mart employees can’t afford company health care

Between 2000-2005, the cost of premiums rose 169 percent for single coverage and 117 percent for family coverage.
The average worker would have to pay one fifth of his paycheck for health care coverage at Wal-Mart. On a wage of about $8 an hour and 29-32 hours of work a week, many workers must rely on state programs or family members or simply live without health insurance.
Employees must pay $218 per month for family health care coverage from Wal-Mart.
In Wal-Mart's employee health plan, deductibles range from $350 to as high as $3,000 for family coverage.

Wal-Mart’s refusal to provide affordable health care impacts taxpayers and other employers

More than 60 percent of Wal-Mart employees--600,000 people--are forced to get health insurance coverage from the government or through spouses’ plans—or live without any health insurance. Wal-Mart shifts the cost of health insurance to taxpayers and other employers, driving up the health costs for all of us.
Recent reports show that Wal-Mart tops the list of companies in many states whose employees and/or their children rely on taxpayers to foot the bill for health care:
- In Alabama, Wal-Mart employees with children on Medicaid cost the state between $5.8 million and $8.2 million to cover 3,864 children.
- Wal-Mart workers in California rely on the state taxpayers for about $32 million annually in health-related services.
- In Tennessee, almost 10,000 Wal-Mart employees are on the state’s expanded Medicaid program.
- In Georgia, over 10,261 children of Wal-Mart employees are enrolled in the state’s PeachCare program for health insurance in families meeting federal poverty criteria.
When other companies get tired of paying the bill for Wal-Mart, they drop or reduce health care benefits for their employees. There are more than 40 million uninsured working families. The more Wal-Mart grows, so do the number of the uninsured.

Wal-Mart continues to further restrict health care coverage eligibility

In 2002, Wal-Mart further restricted the number of employees eligible for coverage by requiring full-time workers to work six months before become eligible to purchase the company’s health insurance. Part-time workers need to wait two years for health care insurance—which only qualifies for single coverage, not dependent coverage. Also in 2002, the company raised the bar for new full-time workers from 28 hours to 34 hours per week to be eligible to purchase the health care coverage.

Wal-Mart Increased Advertising More Than Health Care

In 2004, Wal-Mart spent nearly the same amount on advertising as it did on health insurance. In 2004, Wal-Mart reports that it spent $1.5 billion on health care benefits and $1.4 billion in advertising.
Between 2003 and 2004, Wal-Mart increased its advertising budget by $434 million, only increasing its spending on employee health care by $100 million. That means Wal-Mart increased its spending on advertising by 45 percent while only increasing its spending on employee health care by 7 percent.
In fact, Wal-Mart has consistently increased spending on advertising more than its spending on employee health care. Between 2002 and 2003, Wal-Mart put more new funds into advertising than into health care. Wal-Mart increased spending on advertising by $290 million, while only increasing health care spending by $215 million for the same period. (note: this also occurred in 1995-96, 1997-98,1998-1999).

Wal-Mart’s health plans are getting further out of reach to it employees

Wal-Mart has increased the premium cost for workers by over 200% since 1993--medical care inflation only went up 50% in the same period. In 2002 alone, Wal-Mart’s health care premiums increased by 30%.—nearly triple the national average increase of 11%.
Wal-Mart further restricted the number of associates eligible for coverage by requiring fulltime associates to work six months before becoming eligible to purchase Wal-Mart health insurance. The company also raised the number of hours new employees must work from 28 to 34 hours per week to be eligible to purchase the expensive health care coverage.

Wal-Mart spends minimal on covering employee health benefits

The Wall Street Journal reported that in 2002, average spending on health benefits for each of Wal-Mart’s 500,000 covered employees was $3,500—almost 40% less than the average for all U.S. corporations and 30% less than the rest of the wholesale/retail industry.
The Walton family is worth about $98 billion. Just 1% of the family wealth could provide affordable health care for all Wal-Mart employees.

One Out of Six Wal-Mart Employees Has No Health Care Coverage At All

This is more than double the national percentage for large firms (firms with over 100 employees). In fact, we estimate that Wal-Mart accounted in 2005 for more than 1 out of every 40 uninsured workers who are employed at a large firm.

Anti-union Wal-Mart sued for law violations

On June 4, 2003, a lawsuit was filed on behalf of Wal-Mart workers and supported by the UFCW that alleges the giant retail company violated the law by misleading its workers with language in its employee handbook stating that they would be excluded from benefits if they became union-represented (Lupiani v. Wal-Mart Stores, N.D. Cal., CO32614, filed 6/4/03). The suit, brought on behalf of participants and beneficiaries of various Wal-Mart employee benefit plans and employee pension plans, seeks an order requiring Wal-Mart to change the language in its benefit book and to notify employees of their rights to form a union without losing their benefits.

Union benefits pay

The Institute for Women’s Policy Research (IWPR) reported in 2002 that United Food and Commercial Workers (UFCW) Union-represented supermarket workers are two-and-a half times as likely to have pension coverage than non-union workers and twice as likely to have health insurance coverage than retail food workers without union representation.
For UFCW members, approximately 80 percent of members working in supermarkets are covered by fully employer-paid health benefit plans. 60 percent of union workers have medical care benefits on the job, compared to only 44 percent of non-union workers. (Bureau of Labor Statistics, Department of Labor, Employee Benefits in Private Industry, Table 1, September 17, 2003)