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Compensation & Benefits Library - Health Care/COBRA/HIPAA |
Wal-Mart Expands Employees' Health Benefits Options
By Stephen Miller,
September 2007
[From SHRM Online's
Compensation & Benefits Focus Area
]
When retailing behemoth Wal-Mart takes a step, the ground quakes. So its recent moves regarding employee health benefits are worth noting.
For 2008, Wal-Mart Stores Inc. is expanding the range of health care benefits it offers to its 1.3 million full- and part-time U.S. employees by providing more personalized choices, reduced deductibles, pre-deductible health care credits and a $4 co-pay for over 2,400 covered generic prescriptions. Wal-Mart estimates that the generic prescription program will save employees about $25 million next year.
The company's open enrollment period began on Sept. 22, 2007.
"We worked closely with our associates [employees] to design an even more affordable health benefits package based on what they told us they wanted and needed," Linda Dillman, executive vice president of risk management, benefits and sustainability, said in a statement.
Responding to
Wal-Mart critics
who charge that the retailer shortchanges its employees when it comes to health care and leaves many without any insurance at all (attacks which some contend are highly politicized efforts to spur union organizing and anti-corporate activism), Dillman countered that "90 percent of our associates now have health insurance, and we want that number to increase. Our health coverage next year will be even stronger, offer more options and give people more tools to help them save money and live better lives."
-------------------------------------------------------------
Attacking Wal-Mart's health benefits is, some contend,
a politicized effort to spur union organizing and
anti-corporate activism.
-------------------------------------------------------------
For 2008, Wal-Mart employees will have more than 50 ways of customizing their health care coverage options, according to the company, allowing them to select various deductibles, health care credits and premiums depending on their needs. This is a substantial increase from 2007, when most employees had only nine choices.
"Wal-Mart has added benefits that employees value," said Helen Darling, president of the nonprofit
National Business Group on Health
(NBGH). "Wal-Mart's benefits for part-timers are unusually good for the retail industry�in fact, for a number of industries."
Below are some of the more significant changes in the 2008 benefits package.
The 'Value Plan'
Employees who enroll in the Value Plan, which Wal-Mart says is becoming its most popular plan (it was introduced in 2006), will receive an annual pre-deductible health care credit for each covered family member. They will be able to choose a $100, $250 or $500 health care credit that can be used to pay for covered medical expenses before costs are applied to the annual deductible. Under this credit provision, the first $100, $250 or $500 in eligible medical expenses for each person covered by the plan will be paid by the plan and not the participant.
Beyond the credit, once the Value Plan deductible is met (deductibles vary depending on the premium selected, as noted below), eligible expenses are typically covered by the plan at 80 percent in network. Once the out-of-pocket maximum is met, the plan pays 100 percent of eligible expenses in the network�with no lifetime maximum.
Inpatient and outpatient hospital deductibles have been removed from the Value Plan this year, saving employees as much as $3,000 each over the current Value Plan, according to the company.
Premiums and Employee Coverage
For 2008, Wal-Mart employees will be able to choose a health care plan premium from among a number of options, including:
� Premiums for less than $5 a month
in some areas and no more than $8 per month nationwide. For this premium, employees will have individual health coverage that includes a $100 health care credit, more than 2,400 generic prescriptions for $4 each, a $2,000 deductible and no lifetime maximum.
� Premiums for less than $9 a month
in some areas and no more than $13 per month nationwide. For this premium, employees will have individual health coverage that includes a $100 health care credit, more than 2,400 generic prescriptions for $4 each, a $1,000 deductible and no lifetime maximum.
� Premiums for less than $12 a month
in some areas and no more than $24 per month nationwide. For this premium, employees will have individual health coverage that includes a $250 health care credit, more than 2,400 generic prescriptions for $4 each, a $1,000 deductible and no lifetime maximum.
� Premiums for less than $62 a month
in some areas and no more than $79 per month nationwide. For this premium, employees will have individual health coverage that includes a $100 health care credit, more than 2,400 generic prescriptions for $4 each, a $500 deductible and no lifetime maximum.
Dependent Coverage
As in the past, minor children of a Wal-Mart employee will be eligible for health benefits as soon as the parent is eligible. With a $250 health care credit and $1,000 deductible, all employees can add coverage for children for less than 50 cents per day, no matter how many children an associate has on the plan. Other coverage options are available as well.
Drug Coverage
Employees will be able to get more than 2,400 generic prescriptions for $4 each, as compared with previous coverage of less than 20 generic drugs at a $3 co-pay. Some examples of employee savings provided by the company include:
�
The cost of
Leflunomide, the generic version of Arava, a drug used to reduce inflammation and swelling from rheumatoid arthritis, will drop from about $28 to $4 for a commonly prescribed dosage.
�
The cost of
Azithromycin, the generic version of Zithromax, an antibiotic, will drop from $10.54 to $4 for a commonly prescribed dosage.
�
The cost of
Simvastatin, the generic version of Zocor, a drug used to reduce cholesterol, will drop from about $8 to $4 for a commonly prescribed dosage.
Wal-Mart�s "addition of such a broad $4 generic prescription plan will not only help their employees with a valuable benefit but will make the entire prescription drug industry more affordable and competitive," commented the NBGH's Darling.
Clearer Communications
Wal-Mart is taking additional steps to help employees get information about the enrollment process and coverage options. "Enrollment Made Easy," a DVD designed to explain the enrollment process, will be mailed this month to the home of every Wal-Mart employee. The video shows the changes to the benefits package, outlines steps to personalizing medical choices, and previews decision-support tools and how to use them.
Employees can go online to access materials and enrollment forms, and to use a specially designed web-based tool that helps them evaluate the coverage that best fits their needs.
Wal-Mart's Dillman said that the company engaged employees through a variety of methods, including focus groups, formal surveys, town hall meetings and informal conversations to determine what was most important to them.
Stephen Miller is manager of SHRM Online�s
Compensation & Benefits Focus Area.
Related Articles:
Controlling Health Costs: Success Tips Shared
, SHRM Online Compensation & Benefits Focus Area, September 2007
Employee Fears About Consumer-Driven Health Decline, Study Suggests
, SHRM Online Compensation & Benefits Focus Area, September 2007
Health Insurance Premiums Up 6.1% in 2007; More Cost-Shifting Looms
, SHRM Online Compensation & Benefits Focus Area, September 2007
Wal-Mart Expands Health Benefits, Will Cover Part-Time Workers
, SHRM Online Compensation & Benefits Focus Area, April 2006
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