October 25, 2005

WalMart's Three Card Monty

WalMart has announced two new health insurance plans for its employees. Dan Fogleman, a spokesman for WalMart, said that the company was "listening" to its "associates," not to public criticism of its policies. I would imagine if each associate were asked what kind of insurance coverage they would want from WalMart, each one would say "more" -- certainly, alot more than they are getting.

At a time when corporations across the country are cutting employee benefits, not increasing them, when companies are cutting health care benefits, cutting pensions, and pressuring employees to work more overtime with less pay, it stretches the bounds of credulity to believe that WalMart is really taking a big charitable hit to its profits by offering some new generous health insurance package to its employees. In fact, it isn't.

Here's the analysis from Wake-Up Walmart:

Last year, WalMart had two major health care plan options:

1) the Standard plan and;
2) the Network plan.

Each of those plans has 4 options within them: 1) a $350 deductible; 2) a $500 deductible; 3) a $750 deductible; and, 4) a $1,000 deductible.

This year, WalMart is introducing two additional options:
1) a so-called Value plan, and;
2) Health Savings Accounts (HSA’s).

Since the HSA’s are only available to employees who have already been enrolled in a WalMart health care plan for one year, the HSA’s are not designed to, nor will the HSA’s, increase health care coverage for anyone.

Therefore, the only plan that has the potential to increase the abysmal fact that WalMart only provides health insurance coverage to 48% of its employees is the Value plan. The Value plan, however, comes with a $1,000 deductible. In addition, the Value plan has additional deductibles for in-hospital care, prescription drugs and surgical care. All told, the Value plan’s deductibles plus premiums could be as much as 25% of an employee’s take-home pay for individual coverage and up to 40% for family coverage. Even more disturbing is the fact that the Value plan is almost identical, if not worse, than the $1,000 deductible versions of the existing Standard and Network plans already offered to Wal-Mart employees.

WalMart’s business model has already paved the way for other corporations to try and reduce their health benefits to employees. Currently, the average company with 200 or more employees has 67% of its workers covered under the company health care plan, WalMart is well below that average with only 48% of its employees covered under the company health care plan.
“WalMart’s so-called Value health care plan offers nothing but an empty promise of higher deductibles that remain unaffordable and out-of-reach to most WalMart workers. With WalMart’s poverty-level wages, the average worker would have to spend up to 40% of their take-home pay to purchase the family option of this so-called Value plan. No wonder WalMart admits the taxpayer-funded public safety net is often a ‘better value’ than their own inadequate health care plan.”

It's pretty disingenuous of WalMart to say it is listening to its employees when what it is offering doesn't even come close to what they want, much less what they need. It's just another example of how working Americans come out at the bottom when corporations shuffle the deck. The corporate aristocracy gets dealt all the aces -- over-paid, over-perked, and over-spoiled. The working class gets the three-card monty.


BlogGur said...

In a Fortune Magazine story last week, titled "The Only Lifeline Was the Walmart," the reporter, Devin Leonard, wanted us to believe that Walmart was the post-Katrina savior.

But what the story failed to mention was how in storm ravaged Louisiana, just north of New Orleans, Walmart came up with an interesting twist on "helping" the victims of Katrina.

It went something like this:


HSA Blog said...

I did a quick review of the Walmart plan, is it true that you have to already have health coverage for one year before you can enroll in a HSA plan? Do you have a page reference? being a HSA benefits guy, I wasn't aware you can put that type of restriction on a HSA option.

Stephen McArthur said...

It's probably somewhere in here at the Treasury site


BUt I wonder whether Wal-Mart has the option of requiring that an employee be on another insurance plan for a year before enrolling.

The Treasury makes clear this clear:

"To be eligible for a Health Savings Account, an individual must be covered by a HSA-qualified High Deductible Health Plan (HDHP) and must not be covered by other health insurance that is not an HDHP."

The direct citation for this gem of information was from


Scroll down to the article on "Wal-Marts Sham Health Care"

Hope this helps.....

Blue Cross of California said...

I am happy to see walmart is working to improve health conditions. Health insurance is a major importance to many.