Wal-Mart Unveils Plan To Overhaul Employee Health Care Insurance
Wal-Mart Stores, the largest private employer in the U.S., on Tuesday announced a new health plan that seeks to reduce costs and expand benefits for employees and offer workers generic medications for $4 each, the New York Times reports (Barbaro, New York Times, 9/19).
Under the plan, Wal-Mart employees will have the ability to select from 50 combinations of deductibles, premiums and credits.
The plan will offer Wal-Mart employees:
- A choice between four annual deductibles of $350, $500, $1,000 or $2,000, with monthly premiums that begin at $5 and increase for lower deductibles;
- "Credits" of $100, $250 or $500 in "credits" to help offset the cost of deductibles, with higher premiums for workers who select higher credits;
- Copayments of $4 each for 2,400 generic medications; and
- No lifetime caps on benefits for catastrophic care in most cases and annual caps on costs for workers after they pay annual deductibles of $2,000 or $5,000 (Appelby, USA Today, 9/19).
Linda Dillman, executive vice president for benefits at Wal-Mart, said, "We are removing any barriers of entry" for health insurance for employees, adding, "When you are talking about $8 a month and a $100 health care credit, why would you not sign up?" (New York Times, 9/19).
In addition, Wal-Mart spokesperson Sarah Clark said that the plan will reduce medication costs for employees by an estimated $25 million next year (Coleman-Lochner, Bloomberg/Houston Chronicle, 9/18). Dillman said that the plan will increase health care costs for Wal-Mart, although the increase will remain "in line" with those of previous years (Hudson, Wall Street Journal, 9/19).
Experts said that the number of the 125,000 Wal-Mart employees without health insurance who will enroll in the new plan remains undetermined but added that the plan will improve benefits for about 636,000 workers with coverage.
Ron Pollack, executive director of Families USA, said, "On face value, this looks like a very significant change and improvement."
Helen Darling, president of the National Business Group on Health, called the plan "a very good plan" (New York Times, 9/19).
According to Dallas Salisbury, president of the Employee Benefits Research Institute, "Wal-Mart is moving in the direction of far more complete coverage at lower premiums with greater flexibility" (USA Today, 9/19).
David Nassar -- executive director of Wal-Mart Watch, a group funded by the Service Employees International Union -- said that the plan "shows signs of improvement" from a previous plan offered by Wal-Mart (Kabel, AP/Washington Post, 9/19). However, he said that "these plans are still unaffordable due to low wages or inaccessible due to waiting periods" for eligibility (New York Times, 9/19).
Full-time Wal-Mart employees must wait six months to qualify for health insurance, and part-time employees must wait one year (Wall Street Journal, 9/19).