A bill before the legislature would require Colorado’s largest businesses to provide adequate health insurance plans for their workers or make payments that would contribute toward Medicaid benefits for uninsured workers.
The legislation is a misguided approach, but it sends an unmistakable message to Wal- Mart that it is high time the company provided reasonable benefits to its employees.
Wal-Mart pays less than 1 percent of its $265 billion annual sales for health care for its 1.3 million employees. After recent changes in company benefits, 70,000 previously uninsured Wal-Mart workers signed up for coverage. That’s the direction the giant retailer should be going.
Employers that don’t provide affordable health plans have been getting a free ride because many of those workers end up seeking health care under taxpayer-funded programs such as Medicaid. Others are covered by working spouses’ health plans – a practice that gives Wal-Mart a competitive advantage that has riled Denver’s other grocery chains.
Rep. Judy Solano, D-Brighton, has introduced legislation similar to bills favored by organized labor in 30 states. They’re popularly called “Wal-Mart bills” because the world’s largest retailer is the most visible example of the problem. Wal-Mart workers average $9.50 an hour and often can’t afford premiums for company plans, turning instead to public programs.
Wal-Mart’s reputation was tarnished last fall by a damning internal memo from Susan Chambers, executive vice president for benefits. “We … have a significant number of associates and their children who receive health insurance through public assistance. … In total, 46 percent of associates’ children are either on Medicaid or uninsured.”
A Massachusetts Health and Human Services study shows that Wal-Mart subsidizes 52 percent of workers’ health-care premiums, low compared to such big-box competitors as Home Depot (70 percent) and Target (68 percent).
Last month, Maryland became the first state to pass a benefits bill, requiring companies with more than 10,000 employees to spend at least 8 percent of payroll costs on health benefits or pay the balance into a state low-income insurance fund. Solano’s bill, supported by the Colorado AFL-CIO, would cover companies with at least 3,500 workers, and it sets the amount at 11 percent, based, Solano says, on Colorado costs.
“I personally don’t think it’s morally right for taxpayers to shoulder the burden,” said Solano. She says the bill isn’t targeted specifically at Wal-Mart, but she couldn’t produce specific examples to back up an assertion that other employers might fall under its provisions.
Wal-Mart, which posted profits of $10 billion for the 2004 fiscal year and $2.4 billion for the fiscal quarter ended Oct. 31, 2005, opposes the legislation. Spokeswoman Kelly Hobbs says such legislation “doesn’t address the issue of controlling the soaring costs of health care” and unfairly targets bigger companies.
With more than 22,000 workers, Wal-Mart is Colorado’s largest private employer. At least 20 other companies employ more than 3,500 workers. These include Wal-Mart’s unionized competitors King Soopers, Safeway and Albertson’s, and non-union Target. During 2004 contract negotiations, Denver’s old-line grocery chains claimed that Wal-Mart’s thin benefits practices put them at a competitive disadvantage. Neither King Soopers nor Safeway would comment on House Bill 1316, currently in the Business Affairs and Labor Committee.
Medicaid was intended to cover the indigent and disabled, not employees of a wildly profitable retailer. There shouldn’t be any need for legislation that would single out and punish one company, or even a few companies. Wal-Mart need only improve its benefits plan to avoid the temptation of this sort of targeted legislation.
