Wal-Mart employees to pay more for health care plans

Mon Nov 12, 2012 12:11am EST
 

By Jessica Wohl

(Reuters) - Wal-Mart Stores Inc's (WMT.N: Quote) U.S. employees will pay between 8 and 36 percent more in premiums for its medical coverage in 2013, prompting some of the 1.4 million workers at the nation's largest private employer to say they will forego coverage altogether.

In mailings sent to employees for its recently completed open-enrollment period, Wal-Mart noted that its rates would increase because healthcare costs continue to rise.

For its most popular plan, which covers individuals, the payment per bi-weekly paycheck is going up by $2, or 13 percent. Other plans will see larger increases as the world's largest retailer, known for low prices, tries to control its own costs.

Still, Wal-Mart said average costs its employees will bear should only rise about 4.4 percent in 2013, due to the elimination of some high premium plans, its move to offer free heart and spine surgery to most employees at six health care centers, and provision of other services, such as access to a healthcare advisor. That is less than the 9 percent average increase expected for all American workers next year, according to a study by human resources firm Aon Hewitt, though it isn't clear whether the figures are comparable.

Wal-Mart's example could be a blueprint for other employers trying to manage their costs while also preparing to meet the requirements of President Barack Obama's U.S. Patient Protection and Affordable Care Act, which was passed in 2010, and is widely referred to as Obamacare.

The law, the biggest reform to America's healthcare in decades, is intended to make healthcare less expensive but critics question if it will succeed and it will also take years to fully implement. In the meantime, Wal-Mart and other large companies are trying to control their healthcare costs, which have been rising an average of more than 6 percent per year.

Wal-Mart pays for preventive care such as routine checkups. However, workers must pay deductibles of at least $1,750 before Wal-Mart covers 80 percent of the cost of other care such as doctor visits and diagnostic tests.

The retailer will also defray some costs with a separate contribution of $250 or $500 for individuals, and double that range for families.   Continued...

 
Workers walk through a new Wal-Mart store in Chicago, January 24, 2012. REUTERS/John Gress