Wednesday, September 27, 2006

Wal-Mart Eliminates Health Care Options for Employees and Their Families

Wal-Mart Eliminates Health Care Options for Employees and Their Families

Wal-Mart Shifts More Health Care Costs to Workers By Eliminating Low-Deductible Plans, Increasing Premiums, Increasing 'Spousal Surcharge' to Push Workers Off Company Health

9/26/2006 7:08:00 PM








To: National Desk, Labor Reporter

Contact: Chris Kofinis of WakeUpWalMart.com, 202-486-6422

WASHINGTON, Sept. 26 /U.S. Newswire/ -- Today, WakeUpWalMart.com revealed new, internal Wal-Mart health care documents proving that Wal-Mart's health care benefits are actually getting worse, not better as the company would have the American public and elected leaders believe.

The 2007 Wal-Mart Medical Benefits Booklet, which will be distributed to employees prior to the upcoming enrollment period, details Wal-Mart's plans to eliminate a number of health care options, increase medical premiums, increase surcharges, and will, in total, place an even greater financial burden on Wal- Mart's 1.39 million employees and their families. In 2006, as documented in the report "America Pays, Wal-Mart Saves," available on WakeUpWalMart.com's website, Wal-Mart failed to provide company health care to over 750,000 hard-working families, or 54 percent of Wal-Mart employees and their families, at a cost to American taxpayers of at least $1.39 billion annually.

According to the new documents, as of Jan. 1, 2007, Wal-Mart will only offer two health care options for new hires - catastrophic health care with multiple high deductibles (which Wal-Mart calls the "Value Plan") and Health Savings Accounts, which new employees will not be immediately eligible for (which Wal-Mart has renamed the "Freedom Plan"). By making this change, Wal-Mart is eliminating the Network Saver plans and the standard plans for new hires. The network and standard plans had health care plans with much lower deductibles for employees and their families.

In addition to eliminating all "low deductible" health care options for new hires, Wal-Mart is increasing premium costs by 8.3 percent for the Network Saver Plan, 7.6 percent for the Standard Plan, and 6.9 percent for the Freedom Plan (formerly the Health Savings Account Plan) and charging a whopping $1800 a year "spousal surcharge" to deter spouses from being insured by Wal- Mart. Despite Wal-Mart calling it a 'Value' plan, the plan includes multiple, expensive deductibles like a $300 pharmacy deductible and a $1,000 in-patient deductible on top of the $1,000 deductible the plan already has.

"By eliminating most of its health care plans and replacing them with a high-deductible, catastrophic plan, Wal-Mart is effectively out of the health care business. Despite an overwhelming majority of Americans calling on profitable companies like Wal-Mart to provide real health care coverage to their employees, Wal-Mart is cruelly hurting its employees, cutting health care options, and shifting costs on to the American taxpayer. This sends a terrible message to every responsible corporation that is trying to do the right thing for their employees," said Paul Blank, campaign director for WakeUpWalMart.com.

Despite the damage to Wal-Mart's reputation caused by the Wal- Mart health care crisis, Wal-Mart remains unwilling to address its responsibility to lessen the burden on taxpayers, as well as provide affordable, comprehensive health care to its employees. In addition to Wal-Mart failing to provide company health care to 54 percent of its employees, in 18 out of 19 states where data is publicly available, Wal-Mart leads all employers with the greatest number of employees or dependents on taxpayer-funded public health care assistance. According to Wal-Mart's own internal memo, 46 percent, or nearly 1 out of every 2 children of Wal-Mart workers is either uninsured or on public health care assistance. As a result, American taxpayers paid an estimated $1.39 billion in 2005 and will pay as much as $9.1 billion over the next 5 years to subsidize the health care costs of a company with over $11 billion in annual profit.

"These documents reveal the truth about Wal-Mart's public relations game with the American people and its employees. Last week Wal-Mart touted a low cost generic drug plan in 1 city that includes 124 drugs that represent just 1 percent of all the generic drugs offered in America, while this week Wal-Mart eliminates health care plans for its workers and shifts billions of dollars of health care costs onto its employees and American taxpayers. As one of the richest companies in the world, Wal- Mart should be ashamed," added Blank.

Among the most striking findings outlined in Wal-Mart's 2007 benefits booklet is the substantial health care cost a low-paid Wal-Mart worker would be forced to pay under the so-called "Value" plan. A typical individual Wal-Mart worker who enrolls in the Value Plan will face high upfront costs because of a series of high deductibles, including a minimum $1,000 deductible for individual coverage, a $1,000 in-patient deductible per visit, a $500 out-patient surgical deductible per visit, a $300 pharmacy deductible, and a maximum out of pocket expense of $5,000 for an individual per year.

In total, when factoring the maximum out-of-pocket expense and the cost of the yearly premium ($598 a year for an individual under the Value Plan), a typical full-time worker (defined by Wal-Mart as 34 hours) who earns 10.11 an hour or $17,874 a year, would have pay nearly 30 percent of their total income for health care costs alone.

Incredibly, the health care cost burden actually worsens should an uninsured Wal-Mart worker enroll their family under the Value Plan. Again, because of multiple deductibles for each family member, and when factoring in the cost of the medical premium ($780) and maximum out-of-pocket expense ($10,000), a Wal-Mart worker whose family is insured under the "Value Plan" could pay as much as 60 percent of their total income towards health care costs under Wal-Mart's most "affordable health care" plan.







/© 2006 U.S. Newswire 202-347-2770/

© 2006 U.S. Newswire



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