Health care is one of the largest and most complicated issues facing our nation today. As our CEO Lee Scott has said, “The soaring cost of health care in America cannot be sustained over the long term by any business that offers health benefits to its employees. And every day we don’t work together to solve this challenge is a day that our country becomes less competitive in the global economy.”1
As an employer, a retailer and an influencer, we are challenged to work collaboratively to bring affordable health solutions to our Associates, customers and communities.
Offering Health Benefits that Meet the Needs of Associates
With a work force of more than 1.3 million in the United States, the health care needs of Associates are as diverse as they are. For some, we are their primary employer, while others may hold a full-time position elsewhere and work part-time for us. Some Associates are retirees and students, and some are not the primary breadwinners in their households. Therefore, we are working hard to provide access to a number of options that meet Associates’ financial, health and lifestyle needs.
More than 90 percent of Associates have medical coverage, yet not all rely on Wal-Mart to provide it. In addition to Wal-Mart, they obtain it from other employers, spouses’ or parents’ employers, the Veteran’s Administration or another military plan, Medicare, Medicaid or other state programs. For the more than 1 million Associates and family members who do rely on Wal-Mart, we provide health care coverage that is affordable and accessible, and provides peace of mind.
Our coverage is available to every eligible Wal-Mart Associate and their children. This includes all Associates – full-time and part-time. It also includes their children, who can get coverage starting at less than 50 cents per day, no matter how many children an Associate may have.
Beginning with the autumn 2007 open enrollment period, Associates will have more than 50 ways to customize their health coverage options, meaning they can select various deductibles, health care coverage options, health credits and premiums, depending on their health needs.
Every Associate who works in the continental United States can become eligible for individual health coverage that costs as little as $5 per month in some areas and no more than $8 per month nationwide. For Associates who enroll in the Value Plan, we introduced an annual pre-deductible health care credit for each covered family member who will be able to choose a $100, $250 or $500 credit that can be used to pay for covered medical expenses before costs are applied to the annual deductible. With the credit, the first $100, $250 or $500 in eligible medical expenses for each person covered by the plan are paid by the plan and not by the covered Associate or family member.
In addition to low premiums and pre-deductible health credits, we want to make sure that Associates and their family members have access to the medicines they need. Starting in January 2008, those who participate in our plans will be able to get more than 2,400 generic prescriptions for $4, up from less than 20 generic medicines for $3 in 2007.
In the event of a catastrophic or terminal illness, we don’t want Associates and their families to have to worry about their health care needs not being met. To ensure that peace of mind, our health coverage includes no lifetime maximums on most health care expenses after one year of continuous coverage.
We are proud of the progress we’ve made in the health benefits arena. Not only are 90.4 percent of Associates reporting that they have some form of coverage, but of those Associates selecting Wal-Mart’s coverage for the first time, 53.2 percent said they previously had no coverage, 27.5 percent said they had not previously been able to afford coverage and 7.8 percent said they were previously on Medicaid.
All the good news about our progress does not mean that we think we’ve reached our full potential. The fact remains that 9.6 percent of Associates say they do not have any coverage at all. That’s too many. So perhaps one of our greatest challenges is to better understand why this 9.6 percent decline coverage and what we can do to encourage them to choose it. During our 2008 open enrollment period, we are launching a survey that will examine this group of uninsured Associates more closely. Another challenge is that we are not immune to the realities of a health care system that make it difficult for employers to offer affordable premiums without higher deductibles. We continue to work on these issues and look for solutions that will make our health benefits more affordable for Associates.
1 Lee Scott, speech at the National Governors Association Winter Meeting, Feb. 23, 2006
How Our Health Care Benefits Compare to Other Retailers and Grocers
The changes we’ve made to our health care benefits add up to health coverage that is competitive with other retailers. In fact, a recent Hewitt Benefit Index® showed that amongst a competitor set of 20 unionized and non-unionized retailers and grocers, Wal-Mart measured 102 on health benefits, which was above the average retail score of 100.
Taking the Preventative Approach
We know that health benefits don’t just end with medical coverage. Beyond medical plans, we work to find innovative ways to support Associates in adopting healthy habits and lifestyles. In addition to offering a 10 percent discount on fresh fruits and vegetables, we provide them with a number of wellness discounts and make available several programs within our stores for both Associates and our communities, including: cholesterol, diabetes, heart health, hearing and vision screenings; discounts on fitness options and personalized diet plans; and free hearing exams and discounts on hearing aids.
Our efforts in Associate health and wellness have been recognized by the National Business Group on Health, a national non-profit organization of 266 large employers. Just recently, the group presented us, along with 40 other employers, with its “Best Employers for Healthy Lifestyles 2007” award.