Fair Share Health Care Considered in Colorado

Colorado legislators are considering a bill to require companies with at least 3,500 employees to pay at least 11% of payroll towards health insurance, so that they don't end up being subsidized by the Medicaid program.

In Colorado, there are 27 companies that would be impacted under this measure. Businesses like Wal-Mart, Coors, Frontier Airlines, United Airlines, Vail Resorts, King Soopers and Safeway. Many, like the grocery stores, already comply with the terms set out, but supporters say there is uncertainty about the remainder.

Wal-Mart, which receives a heavy subsidy from health care provided to its workers through government programs and county hospitals, opposes the bill. About 99% of employers of this size nationwide provide health care to their employees.

What are the deatils on Wal-Mart in particular?

Wal-Mart’s Health Care Plan Fails to Cover Over 600,000 Employees
Wal-Mart reports that its health insurance only covers 48% of their employees. Wal-Mart has approximately 1.3 million US employees.

Wal-Mart’s Health Insurance Falls Far Short of the Industry Average
On average, large firms (200 or more workers) cover approximately 68% of their employees. If Wal-Mart was to reach the average coverage rate, Wal-Mart should be covering an additional 260,000 employees (Kaiser Family Foundation & Health Research and Educational Trust, 2004).

Wal-Mart’s Health Care Eligibility is Restrictive
Part-timers—anybody below 34 hours a week – must wait 2 years before they can enroll. Moreover, part-time employees are ineligible for family health care coverage. Full-time hourly employees must wait 180 days (approximately 6 months) before being able to enroll in Wal-Mart’s health insurance plan. Managers have no waiting period. (Wal-Mart 2005 Associate Guide)

Nationally, the average wait time for new employees to become eligible is 1.6 months. For the retail industry it is 2.8 months. (Kaiser Family Foundation & Health Research and Educational Trust, 2004)

Wal-Mart’s Most Affordable Health Plan is Costly
According to Wal-Mart, “We insure more than 500,000 associates, including many family members, who pay as little as $17.50 for individual coverage and $70.50 for family coverage bi-weekly.”

Wal-Mart’s most affordable plan includes a $1,000 deductible for single coverage and a $3,000 deductible for family coverage ($1,000 deductible per person covered up to $3,000). An average full-time worker earns $17,114 a year.

If a full-time Wal-Mart hourly employee elects for single coverage, the employee would have to spend on average 9% of their earnings before the health insurance provided any reimbursement.

If a full-time employee elected for family coverage, an average employee would have to spend 27% of their average earnings before the health insurance covered any costs. (Wal-Mart 2004 Associate Guide and UFCW Analysis).

Wal-Mart Admits Public Health Care Assistance is a “Better Value”
Despite $10 billion in profits, President and CEO Lee Scott said, "In some of our states, the public program may actually be a better value - with relatively high income limits to qualify, and low premiums." (Transcript Lee Scott Speech 4/5/05)

Wal-Mart’s Health Care is Only Getting Costlier
Since 2000, the cost of premiums has risen 169 percent for single coverage and 117 percent for family coverage. (UFCW analysis of annual Wal-Mart Associate Guides).
In comparison, premiums for family coverage in the U.S. have increased only by 59%, since 2000. (Employer Health Benefits: 2004 Annual Survey, Kaiser Family Foundation & Health Research and Educational Trust, 2004)

Wal-Mart Employees Pay More for Health Care Costs
In 2003, Wal-Mart employees, in total, covered approximately 40% of the plan costs (5500 Filings). Nationally, on average employees at large firms (over 200 employees) cover only 16% of single coverage costs and 24% of family coverage costs (KFF, 2004).

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%.

Wal-Mart Spends Less to Provide Health Care
Wal-Mart’s spending on health care for its employees falls well below industry and national employer averages. In 2002, as reported in the Wall Street Journal, Wal-Mart spent an average of $3,500 per employee. By comparison, the average spending per employee in the wholesale/retailing sector was $4,800. For U.S. employers in general, the average was $5,600 per employee, Therefore, Wal-Mart’s average spending on health benefits for each covered employee was 27% less than the industry average and 37% less than the national average. (Bernard Wysocki, Jr. and Ann Zimmerman, “Wal-Mart Cost-Cutting Finds a Big Target in Health Benefits,” WSJ September 30, 2003 p1)

Wal-Mart Only Spends 75 Cents an Hour Per Employee for Health Benefits
In 2003, Wal-Mart spent $1.4 billion on its health insurance. This amounts to an employer contribution of around only $0.75 an hour per employee. This accounts for approximately a half-percent of Wal-Mart's $259 billion in sales in 2003. (Wal-Mart 5500 Filings, Wal-Mart Annual Report). . . .

One Out of Seven Wal-Mart Employees Has No Health Care Coverage At All
This is nearly double the national percentage for large firms (firms with over 100 employees). In fact, we estimate that Wal-Mart accounts for more than 1 out of every 40 uninsured workers, who are employed at a large firm. (walmartfacts.com; Wal-Mart Annual Report; “Employer-Sponsored Health Insurance Coverage: Sponsorship, Eligibility, and Participation Patterns in 2001,” Bowen Garrett, Ph.D., released by the Kaiser Family Foundation September 2004).