Wal-Mart Backs Employer Mandate On Insurance

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"In a major break with most other large companies, Wal-Mart Stores Inc. Tuesday told the White House that it supports requiring employers to provide health insurance to workers, a centerpiece of President Barack Obama's effort to provide near-universal coverage to Americans," The Wall Street Journal reports. "Wal-Mart -- which provides insurance to employees and wants to level the playing field with companies that don't -- on Tuesday delivered a letter to President Obama taking a different stance." The letter was signed by Wal-Mart Chief Executive Mike Duke, as well as Andrew Stern, president of the Service Employees International Union, and John Podesta, "who led President Obama's transition team and is chief executive of the Center for American Progress, a liberal-leaning think tank." Wal-Mart's new stance is "a shift from its previous stance on health-care overhaul and follows years of tussles with organized labor." The Journal adds a caveat: Wal-Mart "isn't changing its policies. The company says it supports the employer mandate because all businesses should share the burden of fixing the health-care system. ... Wal-Mart's support for a broad mandate also appears to be aimed at beating back an alternative that may be less favorable to the company. The Senate Finance Committee is considering a measure expected to result in a more burdensome health-insurance requirement for companies that have lower-wage workers" (Adamy and Zimmerman, 7/10).

The Washington Post reports that "opinion in the corporate world over an employer mandate is split." The National Retail Federation "is pressing for an individual mandate and significant insurance market reforms" and opposes an employer mandate. But other "large employers support an employer mandate as a way to "level the playing field," said Helen Darling, president of the National Business Group on Health, which represents primarily Fortune 500 companies."

Kaiser Health News spoke with James P. Gelfand, the senior manager of health policy for the U.S. Chamber of Commerce, which is staunchly opposed to any kind of employer mandate. Gelfand calls an employer mandate the Chamber's "number one issue." He says it "makes people who don't make a lot of money worth less to their employers" and will lead to mass layoffs. "We're just trying to make Congress understand this is a bad, bad policy. It's gonna hurt the people they want to help." He says the Chamber is "trying to work inside" the Congressional system to shape reform instead of launching the "war tactics" of an advertising campaign, but adds "just keep in mind, though, that we could if we have to" (Gold, 7/1).

KHN asked Wal-Mart spokesman David Tovar whether the company's new stance on the employer mandate represents a "major break for Wal-Mart from the Chamber of Commerce." Tovar answered that "we think this is the right thing for our business, which is why we came out in support of it." The employer mandate, he explained, is a solution that "should be considered in any type of health care reform proposal," in addition to "stronger efficiency provisions as well as a trigger mechanism to ensure that the cost reductions are met. We think the time is now. The status quo is not an option. The present system is not an option (Rau, 7/1).

The New York Times: "With 1.4 million employees, Wal-Mart employs more people than any other private company in the United States. Slightly more than half of Wal-Mart's employees, 53 percent, are insured by the company, although [Leslie A. Dach, Wal-Mart's top lobbyist] said the company estimated that 94 percent of its workers had some form of insurance, either through spouses, parents or - in the case of 36,000 Wal-Mart employees - Medicaid, the government insurance plan for the poor, Mr. Dach said" (Stolberg, 7/1).

CQ Politics: "Wal-Mart's backing comes with some conditions, said spokesman Greg Rossiter. Rossiter said that Wal-Mart wanted an employer mandate that would have companies pay in based not on how many employees they have, but based on "profit per employee." That would favor companies such as Wal-Mart with high numbers of low-wage employees by lowering the per-employee cost of any mandate" (Armstrong, 6/20).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.