Wal-Mart Fighting Health Care Laws
Last updated Wednesday, February 15, 2006 10:30 PM CST in Business
By Anita French
The Morning News
Wal-Mart, which often finds itself embroiled in controversy, is now facing another battle. The world's largest retailer is fighting efforts by several states to make the Bentonville-based company pay more for employee health care.
Suffolk County in New York became the most recent government body to pass legislation aimed at making large companies -- specifically Wal-Mart Stores Inc. -- boost their health care contributions for employees. The New York law mandates that non-union grocery sellers pay at least $3 per hour toward employee health care costs.
The legislation's success apparently prompted Democrats in the New York State Senate to consider introducing a similar bill there.
But Wal-Mart is banking on a lawsuit filed by its ally, the Retail Leaders Industry Association, to stop the health-care legislation bandwagon.
"We share RILA's opinion that existing (health-care) laws are regulated by federal law, not by the states. We're working to educate legislators across the country on this issue and to find meaningful ways to address the real issue of controlling the soaring cost of health care. These bills aren't the answer," said Wal-Mart spokeswoman Kelly Hobbs in Washington.
The Retail Industry Leaders Association filed two lawsuits challenging the Suffolk County law and health-care legislation passed last month by Maryland -- the first state to enact such a law.
At least 17 other states are considering similar bills.
In its lawsuits, the Retail Industry Leaders Association asserts that state and local laws regulating employee health benefit plans are invalidated by federal law, specifically the Employee Retirement Income Security Act.
Paul Kelly, a spokesman for the Retail Leaders Industry Association, said his organization plans to carry its opposition to wherever such legislation is considered.
"We're fighting it state by state ... wherever it is introduced before it becomes law," he said. "We hope to prevail (in the two lawsuits) and that lawmakers across the country will take notice."
The Maryland law, scheduled to go into effect in 2007, applies to companies in the state with more than 10,000 workers. They will have to spend at least 8 percent of their payroll up to a certain level on health benefits, or 6 percent for nonprofits. If they don't, they must pay the difference to a state fund to subsidize Medicaid.
Wal-Mart has come under attack over the last few years as more and more states released information showing that the retailer's employees topped the list of those receiving state aid or welfare.
Utah became the latest to release such figures when it revealed data this week showing Wal-Mart headed the list by having 234 workers getting Medicaid or related assistance. Trailing Wal-Mart were employees of Convergys Corp. and McDonald's.
Also, Arizona said recently that close to one of every 10 Wal-Mart employees is getting health insurance paid for by Arizona taxpayers. Other states that have released similar data include Alabama, Georgia, Massachusetts, Connecticut, Tennessee, West Virginia, Wisconsin and Washington.
Wal-Mart does no better in its home state. The Department of Health and Human Services in Little Rock released figures last year showing that, out of Wal-Mart's 44,368 employees in Arkansas, 3,971 -- or 8.9 percent of its work force -- were receiving public assistance of some kind at a cost to taxpayers of around $4 million.
The Utah Department of Health estimated that it was costing state taxpayers $42 million to subsidize low-wage employers.
Wal-Mart has questioned the accuracy of the state figures, and said its own survey shows that Wal-Mart employees have health-care coverage at about the same rate as other retailers.
Not surprisingly, unions and Wal-Mart critics have jumped on this issue to push legislation such as passed in Maryland and New York.
Jim Papian, spokesman for the United Food and Commercial Workers in Washington, said the lawsuits filed by the Retail Industry Leaders Association "miss the point."
"The point should be, how do we make sure employees have access to quality care," he said. "The Maryland attorney general scoured (the state's) bill and believes it's legal."
Kelly of the Retail Industry Leaders Association said he believes unions are playing a large role in the states where health-care legislation aimed at Wal-Mart is being considered or has passed.
"The politicians introducing so-called 'Fair Share' legislation in various states are often linked to organized labor unions," said Wal-Mart spokeswoman Kelly Hobbs. "These bills are nothing more than political ploy and have nothing to do with health care."
She said several states, including West Virginia and Wisconsin, have already reconsidered or abandoned health-care legislation aimed at companies.
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