Thursday, February 23, 2006

Wal Mart Sees the Handwriting on the Wall

After the state of Maryland passed a law requiring Wal Mart to offer health benefits to workers or pay into a state pool and labor threatened to take their show on the road, Wal Mart signaled today of upcoming changes in their health care program.

The New YorkTimes reports that the giant retailer will be lowering eligibility requirement for part-time workers from two years, although the exact time frame was not released.

In addition, the company will allow part-time employees to enroll their children in the company's health insurance plan. Until now, Wal-Mart covered only the children of full-time workers.

At the same time, Wal-Mart said it would make a new health-care plan introduced in several regions this year, with premiums as low as $11 a month, available to half of its employees by next year.

That plan allows for several prescriptions and doctors visits before a $1,000 deductible kicks in. But it is unlikely to cover a complicated illness or expensive hospital stay during the first year, when there is a $25,000 insurance cap. In In addition, out-of-pocket payments range from $300 for prescriptions to $1,000 for hospital stays.

"Wal-Mart insures less than half of its 1.3 million employees in the United States," with states picking up the medical tab for the remaining workers. A similar bill from the the one passed, vetoed and then ultimately overridden is currently being considered by state legislatures in "a dozen more states."

Looks like the gravy train ride is slowing down. Up to now, Wal Mart unfairly competed with mom-and-pop sellers on Main Street, putting them out of business, not simply because of economies of scale, but because they dodged paying any benefits and then relegated their cost to states.

Kinna hard to compete with conglomorates when they are being subsidized with your tax dollars.

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