Wal-Mart Endorses Employer Health Insurance Mandate

By Ceci Connolly
Washington Post Staff Writer
Wednesday, July 1, 2009

After years of strenuous opposition, Wal-Mart, the nation's largest private employer, announced yesterday that it supports a controversial proposal requiring businesses to contribute to the cost of employee health insurance.

The retailing giant's endorsement comes as the push and pull on health reform intensifies, and it could have broad economic and political consequences. Many business groups, displeased with the shape of the legislation that has emerged so far, have begun to mobilize against President Obama's top domestic priority.

Obama is countering with a series of public events -- including today's town hall meeting in Annandale -- and private negotiations with industry players such as Wal-Mart.

Yesterday's announcement, which came after a White House meeting, brought together Wal-Mart, the liberal think tank Center for American Progress and the Service Employees International Union, which has often sparred with the retailer over the benefits it provides its 1.4 million workers.

"We are entering a critical time during which all of us who will be asked to pay for health care reform will have to make a choice on whether to support the legislation," leaders of the three groups wrote in a letter to Obama. "This choice will require employers to consider the trade off of agreeing to a coverage mandate and additional taxes versus the promise of reduced health care cost increases."

Three years ago, Wal-Mart battled initiatives in several states, including Maryland, that would have required large employers to provide health insurance or contribute money toward coverage for workers. Yesterday, company executives said they decided to back a federal "employer mandate" if certain conditions are met: It must be part of a broad health-care reform bill, it should exempt some small firms, and it must be pegged to a moderately priced benefits package similar to the coverage Wal-Mart offers most of its workers.

"In order to reduce the increase in health-care costs, you've got to cover as many people as possible," Leslie Dach, executive vice president of corporate affairs at Wal-Mart, said yesterday after meeting with White House Chief of Staff Rahm Emanuel.

Wal-Mart declined to discuss the size and shape of a mandate it was willing to support.

About 158 million Americans receive health insurance through the workplace, though the percentage has dwindled as costs have risen and the economy has soured. Wal-Mart, once criticized for its stingy health benefits, has moved to provide basic coverage to many more workers. Today, 95 percent of its employees have some form of health insurance, through the company, a family member or the government.

Opinion in the corporate world over an employer mandate is split.

"This would be bad for businesses, employees and consumers everywhere, even Wal-Mart shoppers," said E. Neil Trautwein, a vice president at the National Retail Federation. The federation is pressing for an individual mandate and significant insurance market reforms.

But some large employers support an employer mandate as a way to "level the playing field," said Helen Darling, president of the National Business Group on Health, which represents primarily Fortune 500 companies. "A lot of big companies in the retail business already provide it, and they feel that creates a competitive disadvantage for them," she said.

Wal-Mart is a major political player, spending millions of dollars on lobbying and campaign contributions in recent years. Its political action committee gave $3 million to federal campaigns during the 2008 cycle, primarily to Republicans, according to data from the Center for Responsive Politics. The donations included $12,000 to Sen. Max Baucus (D-Mont.), who is leading health-care reform efforts as head of the Senate Finance Committee.

The company also spent more than $8 million on lobbying from January 2008 through March of this year, including a strong focus on health-care reform, according to Senate disclosure documents.

Wal-Mart's interest in health policy extends beyond employer mandates, including policies that might affect its pharmacy business.

Staff writer Dan Eggen contributed to this report.

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