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Wal-Mart to Expand Employee Health Insurance Plan and In-Store Clinic Use

Situation for Noon Eastern Standard Time, Friday, February 24, 2006

By Michael Barbaro

Wal-Mart Stores, facing a raft of state bills that would require it to increase spending on employee health insurance, plans to ease several longstanding — and heavily criticized — restrictions on who is eligible for benefits, the company said Thursday.

Wal-Mart said that for the first time it would permit part-time employees to enroll their children in the company’s health insurance plan, and it pledged to significantly reduce the waiting period before a new part-time employee is eligible for benefits, though it declined to specify how much.

The new eligibility rules are intended to increase the number of employees who can participate in the insurance plan, but it was unclear how significant the impact would be because Wal-Mart gave little detailed information about its plans.

Even with the new plan, Wal-Mart’s workers, whose average pay is less than $20,000 a year, will pay monthly premiums and hefty annual deductibles.

The changes, which Wal-Mart’s chief executive, H. Lee Scott Jr., plans to formally announce Sunday before a meeting of the nation’s governors, underscores how big a political and public relations threat the health care issue has become for the nation’s largest private employer.

Wal-Mart insures less than half of its 1.3 million employees in the United States, and it has come under fierce criticism for skimping on benefits and shifting the cost of health care to state governments.

In the last two months, the Maryland Legislature has passed a law that would force Wal-Mart to improve its benefits, and a dozen other states, including California, Colorado and Rhode Island, have begun considering similar bills.

Wal-Mart originally planned to announce the new benefit rules later this year, but it rushed the news out this week before the governors meeting in Washington.

The new eligibility requirements are notable because, until now, Wal-Mart offered health insurance to the children only of full-time workers, and it required part-time workers to wait two years before enrolling in a plan. Full-time workers must wait six months.

Wal-Mart also said it would expand the use of in-store clinics to treat employees and nonemployees. Such clinics, which the company set up in Arkansas, Oklahoma and Indiana as a test six months ago, are designed for routine, nonemergency medicine, like a strep throat or an earache.

So far, Wal-Mart has established nine clinics. They are operated by third-party medical providers who rent space from the company, much like hair salons or banks do. By the end of the year, there will 59 clinics, a Wal-Mart spokeswoman, Mona Williams, said. On average, she said, visits to the clinics cost about $45, which some insurers may cover.

At the same time, Wal-Mart said it would make a new health care plan, with premiums as low as $11 a month for an individual, available to half of its employees by next year. Under the plan, which was introduced this year in several regions, the premiums are $9 more a month for children.