Wal-Mart Watch Statement On Wal-Mart Health Care Enrollment Rates
For Immediate Release
Thursday, January 11, 2007
Washington, D.C. – Wal-Mart today released its new employee health care enrollment rates, showing that Wal-Mart’s 2006 enrollment rates remain virtually unchanged from 2005, and a majority of Wal-Mart employees continue to reject the company’s health care plan. Wal-Mart Watch executive director Andrew Grossman releases the following statement in response to the new figures:
“Wal-Mart spent the last year touting transformational changes to its health care plan, yet a majority of its employees are rejecting the plan and choosing other more affordable options for their families. The world’s largest retailer marketed a new health care product for its employees, and the employees didn’t buy it. Wal-Mart’s overall enrollment rate moved exactly one percentage point, and it will stay there until the company makes real and substantive changes to the plan.
“Wal-Mart’s rhetoric demonstrates an inability to even understand the true dangers of the health care crisis plaguing the company. Investors, analysts, consumers and other companies are looking to Wal-Mart for health care solutions, and Wal-Mart is failing to offer real results.”
Background on why a majority of Wal-Mart employees are rejecting the company’s health care plan:
- Wal-Mart Employees Still Wait Twice As Long for Health Care Coverage Than Workers At Other Retailers. The Wal-Mart average for full-time workers to qualify for benefits is six months, compared to the retail average of three months and the average waiting period for large firms (200 or more workers) of 1.5 months. [Wal-Mart 2006 Associate Benefits Book; The (Montreal) Gazette, 4/18/06; Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust]
- Wal-Mart Health Insurance Coverage Lags Far Behind National Average. Nationally, 67 percent of workers in large firms (200 employees or more) receive their health benefits from their employer. More than 80 percent of Costco workers are covered by their company plan. [Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust; New York Times, 10/24/05]
- Wal-Mart Employees Spend More On Health Care Than Other Retail Employees. “On average, Associates spend 8 percent of their income on healthcare (premiums plus deductibles plus out-of-pocket expenses) for themselves and their families, nearly twice the retail average. The number varies significantly by plan type, rising to 13 percent for those on the Associate and Spouse plan.” [Susan Chambers, 2005 Internal Wal-Mart Health Care Memo]
- Wal-Mart Workers Have Significantly Higher Than Average Out-of-Pocket Premium Costs. According to the Center for a Changing Workforce, Wal-Mart employees paid 41 percent of insurance premium costs. Costco employees paid about 10 percent of premium costs. Nationally, workers today pay an average of 16 percent of premiums for single coverage and 26 percent of premiums for family coverage. [Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust; Wal-Mart and Healthcare: Condition Critical, Center for a Changing Workforce, 10/26/05]
- Wal-Mart Under-Spends On Benefits. A recent study of Wal-Mart’s health care offering by the Center for a Changing Workforce found that company spending on employee health care has been well below-average. “According to company testimony given in 2004 (sic), Wal-Mart spent $3,100 per employee on health insurance. A Harvard Business School study estimated Wal-Mart’s average annual cost at $3,500 in the same year. By comparison, the average spending per employee in the wholesale/retailing sector was $4,800, and for U.S. employers in general, the average was $5,600 per employee.” [Center for a Changing Workforce, >Wal-Mart and Health Care: Condition Critical]
- Our Critics Are Correct, Our Coverage Is Expensive. “Our healthcare offering is also vulnerable to attack… Wal-Mart’s critics can also easily exploit some aspects of our benefits offering to make their case; in other words, our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of Associates and their children on public assistance.” [Susan Chambers, 2005 Internal Wal-Mart Health Care Memo]
- Lee Scott: Medicaid Makes Our Plan Look Lucrative. “There are government assistance programs out there that are so lucrative it’s hard to be competitive, and it’s expensive to be competitive,” Scott said. [St. Louis Post-Dispatch, 4/6/05]
