Wal-Mart Expands Staff Health-Insurance Benefits

By Marcus Kabel
Associated Press
Wednesday, September 19, 2007

Wal-Mart is adding $4 generic drugs to its health insurance plans and offering lower premiums and deductibles, the third consecutive year of changes to the employee health benefits that unions have criticized.

The retailer said employees will be able to buy more than 2,400 generic prescriptions for a co-payment of $4 each under the 2008 plan. That compares with fewer than 20 generic drugs for a co-pay of $3 under the existing plan. Wal-Mart, based in Bentonville, Ark., offers 331 $4 generic drugs to customers.

The plan also gives employees more options for the amount they pay in premiums and deductibles and what they can receive in health-care credits. Premiums on its lowest-priced Value Plan range from $5 to $8 a month, down from $24 a month. That plan has a deductible of $2,000 a year but no maximum on coverage and an upfront credit of $100 toward medical costs before the deductible kicks in.

"We have a very diverse workforce, and they are at different stages of their lives," said Linda Dillman, Wal-Mart executive vice president of risk management, benefits and sustainability. "One of the things they told us was they wanted choice."

Since late 2005, Wal-Mart has shortened the waiting period to become eligible for insurance, allowed part-time workers to insure their children, and lowered premiums and co-pays for prescription drugs.

The result has been an incremental increase in workers taking the company plan. As of the start of this year, 47 percent of Wal-Mart's 1.34 million U.S. employees were enrolled in company coverage, compared with 46 percent a year earlier and 43 percent at the start of 2005.

Wal-Mart has said most of the remaining workers are insured through other plans, such as a spouse's or one from a second job. The retailer said 90 percent of its employees have some form of health coverage.

The company's health coverage has been a focus of union-led critics, who claim that Wal-Mart skimps on benefits.

An internal company memo leaked to unions and the media in October 2005 conceded that the company was vulnerable to criticism because its health plans at the time were expensive for low-income workers with families.

David Nassar, executive director of Wal-Mart Watch, which is funded by the Service Employees International Union, said in a statement that the changes to the plan "show signs of improvement." But he criticized the company's 12-month eligibility requirement for part-time workers as too long.

Staff writer Ylan Q. Mui contributed to this report.

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