Wal-Mart Says It Will Improve Health Benefits

By Ylan Q. Mui
Washington Post Staff Writer
Friday, February 24, 2006

Wal-Mart Stores Inc. announced plans yesterday to upgrade its health care benefits during a barrage of criticism from labor unions and state legislators who say the world's largest retailer does not provide adequate coverage for its low-wage employees.

One of the most significant changes is a reduction in the two-year waiting period for part-time workers to become eligible for benefits. Mona Williams, a Wal-Mart spokeswoman, said yesterday that the new waiting period has not been determined.

The company also said it would allow children of part-time workers to become eligible for coverage, and that it would extend its Value Plan, which offers health insurance for $11 per month, to half of its employees by next year.

Critics of Wal-Mart took the news as a sign that the retailing giant has begun to respond to attacks calling it stingy, but they remained skeptical of the company's intentions.

"Wal-Mart's proposed changes are clearly designed to try and salvage a faltering public image, rather than make substantive changes to improve health care benefits for its employees," said Paul Blank, campaign director for WakeUpWalMart.com, a group backed by the United Food and Commercial Workers International Union.

Wal-Mart chief executive H. Lee Scott Jr. is expected to discuss the changes Sunday at a meeting in Washington of the National Governors Association. The complete package will be announced over the next several months.

"In the weeks ahead, we're going to take significant steps to make our health benefits even more affordable and accessible to the working families we employ," Scott said in a written statement yesterday.

Wal-Mart's health care plan has become a hot-button issue across the country in recent months. In January, Maryland passed legislation, often referred to as the "Wal-Mart bill," requiring companies that employ more than 10,000 people to spend 8 percent of their revenue on health care or make a contribution to the state's insurance program for the poor. Wal-Mart, which employs 17,000 Marylanders, is the only company in the state that does not meet that requirement.

Two dozen states are considering similar legislation, according to the AFL-CIO. Proponents assert that the bills are needed to prevent Wal-Mart from shifting its health care costs to states. A report released yesterday by WakeUpWalMart.com estimated that 300,000 Wal-Mart workers and their families received publicly funded health care in 2005 at a cost of $1.37 billion, through programs such as Medicaid and the State Children's Health Insurance Program.

"I think the health care bills we are pushing around the country have had tremendous impact on Wal-Mart," said Naomi Walker, state legislative director for the AFL-CIO.

But Scott said that private businesses should not be responsible for solving the nation's health care issues. He is expected to ask government officials on Sunday to work with business leaders on a solution.

Staff writer Amy Joyce contributed to this report.

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