Feb. 14, 2006 – Facing a staggering cost shift from the worldâ€™s largest retailer, Washington is poised to become the second state in the country to mandate that large employers provide workers with health insurance or face penalties.
State Senate and House committees recently approved identical versions of the Fair Share Health Care Act, and sponsors expect it to come up for a full vote next week. Both versions of the bill were introduced early this year and received a boost with the release of three studies showing that the state effectively subsidizes Wal-Mart workersâ€™ healthcare coverage with millions each year.
Last week, Washington Senate Democrats released an analysis showing that state health care costs for the companyâ€™s employees and their spouses may be as much as $12 million a year. The federal government kicks in another $10.6 million a year to cover Wal-Martâ€™s Washington State workers, found the report, which Senate staff provided to The NewStandard.
According to the study, Wal-Martâ€™s healthcare burden on the state far out-strips those of the retailerâ€™s main competition in the state: fellow retail giants Target, Safeway and Fred Meyer. Two other studies completed in January and reportedly reaching similar conclusions have not been made public, and Wal-Mart officials have raised questions about the methodology of all three reports.
In a statement last week, the company called the Washington study a "ploy" and questioned the data-gathering used for the report released last Tuesday. "Extrapolating any further conclusions from state government data that hasn't been publicly released, defended or debated is simply irresponsible," the company said.
Last weekâ€™s report explains that it uses averages for state and federally administered health programs in calculating the price tag and does not include costs the state incurs for covering minor dependents of Wal-Mart workers. The data are based on projected 2006 employee benefit costs and use employment figures reported by a January 24 Seattle Times article that the company has not publicly disputed.
Additionally, Wal-Mart contends that recent revisions to its health benefits system have significantly changed the picture.
The annual state healthcare costs paid to the companyâ€™s Washington employees are also the highest of any state to date, according to information collected by Wal-Mart Watch, a group backed by organized labor.
Wal-Martâ€™s home state, Arkansas, comes in a distant second, paying around $4 million a year to cover the companyâ€™s workers in 2004, as The NewStandard reported previously.
The Washington State legislation would require companies with 5,000 or more workers to spend at least 9 percent of their payroll on healthcare coverage or make up the difference to the state.
Last month, Maryland lawmakers enacted a similar bill with double the employee threshold over a gubernatorial veto. Suffolk County, New York also recently passed a law mandating that non-union grocery sellers pay at least $3 per hour toward employee healthcare costs.
The Retail Industry Leaders Association is suing both Maryland and Suffolk County to repeal their laws.
The new information on Wal-Martâ€™s impact on healthcare costs is in line with several recently released studies of employer-sponsored health benefits showing that reductions in healthcare spending by corporations shift the costs of coverage onto government programs for the poor, like Medicaid.