“Wal-Mart provides health care options to their employees and families that have a deductible of $1,000 for individuals and $3,000 for families. Wal-Mart employees must endure long waits to qualify for benefits: six months for full-time employees and one year for part-time employees”. (Wal-Mart 2006 Associate Benefits Book; Wal-Mart Press Release 2006) The Wal-Mart average for “full-time workers to qualify for benefits is six months, compared to the retail average of three months and the average waiting period for large firms (200 or more workers) of 1.
5 months”. (Wal-Mart 2006 Associate Benefits Book; The (Montreal) Gazette; Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust) The Wal-Mart 2006 Associate Benefits Book lays down the specific policies of the Associate Medical Plan (AMP) and reveals that the plan is filled with additional charges. Standard services – including office visit co-pays, emergency room visits and ambulance services, per-event deductibles, and pharmacy co-pays – are not applied toward the standard deductible.
(Wal-Mart 2006 Associate Benefits Book, pp. 32 and 38) The federal minimum wage rate is “$5. 15” an hour. (http://www. dol. gov) Approximate nationwide average hourly wage for Wal-Mart employees is “$8. 00” an hour. (http://www. counterpunch. org/cox04202004. html) In May 2005, the company reported that full-time workers made on average “$9. 68” per hour. (Greenhouse, Steven, op. cit. ) Full-time workers averaging 34 hours per week would have an average income of $17,114. With the minimum wage of a Wal-mart employee, the insurance policy is quite expensive.
There are only few Wal-mart employees are with insurance due to several factors. These are the strict eligibility rules can exclude a large number of employees and the high out-of-pocket costs—or limited plan coverage—can serve as a disincentive for a large number of employees. Once employees become eligible, they face the high cost of participating in Wal-Mart’s health insurance plan. And those costs are an important reason why many eligible employees simply do not sign up. On October 24, the company announced a new “inexpensive” plan, with lowered premiums for 2006.
This plan will cost $273 in premiums for individual coverage, plus a $1,000 deductible. It’s the fine print in this new “value” plan that provides the catch—the plan adds new separate deductibles of $1,000 per hospital visit, a $300 pharmacy deductible, an emergency room deductible, an ambulance deductible, etc. Preventive health expenses such as pap smears and office visit co-pays do not apply to the basic deductible, making it effectively higher. Just as alarming is the fact that that same plan has an individual co-insurance maximum
of $5,000, which, by itself, is almost 30 percent of a typical employee’s wages. And that’s not all—that $5,000 maximum doesn’t count pharmacy expenses and benefits paid at less than 80 percent, including services provided out-of-network and mental health treatment. It’s important to note that researchers have determined that few individuals below 200 percent of the poverty level can afford to purchase coverage if premiums exceed five percent of income. (Davis, Karen) In line with this, Wal-Mart’s health insurance practices cause enormous problems for employees and their families, other employers and taxpayers.
An average Wal-Mart employee is underinsured and could face bankruptcy in a catastrophic health situation. Due to this problem other employers and taxpayers are carrying the burden of paying for at least 50,000 company employees and dependents on Medicaid, plus uninsured employees.
Works Cited
Wal-Mart 2006 Associate Benefits Book; Wal-Mart Press Release, 17 April 2006 Wal-Mart 2006 Associate Benefits Book; The (Montreal) Gazette, 18 April 2006; Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust
Wal-Mart 2006 Associate Benefits Book, pp. 32 and 38 U. S Department of Labor in the 21st Century. 14 May 2007. U. S. Department of Labor. 15 May 2007 <http://www. dol. gov> Cox, Stan. Turning People into Profits Wal-Mart’s Magic Numbers. 20 April 2004. Counterpunch. 15 May 2007 <http://www. counterpunch. org/cox04202004. html> Greenhouse, Steven, op. cit Davis, Karen, Michelle M. Doty, and Alice Ho, “How High Is Too High? Implications of High-Deductible Health Plans,” The Commonwealth Fund, April 2005