Inside This Issue - News
Wal-Mart backs employer insurance mandate
July 20th, 2009
WASHINGTON – In a major break with most other large companies, Wal-Mart Stores Inc. says it supports President Barack Obama’s plan to require employers to provide health insurance to workers.
Wal-Mart’s endorsement of the so-called employer mandate represents a dramatic reversal for the retailing giant and a boost for the White House as it tries to inject momentum into its top domestic priority.
“We are for shared responsibility,” Wal-Mart president and chief executive officer Mike Duke wrote in a letter to the White House late last month. “Not every business can make the same contributions, but everyone must make some contribution.”
The letter — which was co-signed by Andrew Stern, president of the Service Employees International Union, and John Podesta, chief of the Obama transition and head of the Center for American Progress — does not detail how the requirement would be structured or what sort of penalties could be imposed on companies that fail to offer insurance.
“From a business perspective, health reform could not be more critical,” the letter said. “Premiums are expected to rise by 20% in less than four years, according to research by professors at Harvard University — costing 3.5 million workers their jobs and cutting insured workers’ average annual incomes by $1,700.”
Wal-Mart’s endorsement of an employer mandate goes against the stance taken by many employers and business organizations and is a 180-degee turnaround from the company’s past position.
Just three years ago Wal-Mart fought efforts in states such as Maryland that would have required large companies to offer health insurance to workers. Though it succeeded in defeating those initiatives, the company endured a raft of bad publicity and since then has moved toward covering more of its 1.4 million employees.
“We are entering a critical time during which all of us who will be asked to pay for health-care reform will have to make a choice on whether to support the legislation,” Duke said in his letter. “This choice will require employers to consider the trade-off of agreeing to a coverage mandate and additional taxes versus the promise of reduced health care cost increases.”
Those watching the health care debate unfold say the support of Wal-Mart, the nation’s largest private employer, could give momentum to one of the most contentious aspects of legislation taking shape in Congress to fix the health system.
To help pay for covering the 46 million uninsured, lawmakers have proposed mandating that all but small employers provide insurance for workers or help pay for it. But lobbies for large corporations have opposed the idea. The U.S. Chamber of Commerce, for instance, has said such a mandate would prompt companies to cut jobs, lower wages and possibly drive them out of business.
The National Retail Federation, the industry’s main lobby, says it is “flabbergasted” by Wal-Mart’s move.
“We have been one of the foremost opponents to an employer mandate,” NRF vice president Neil Trautwein says. “We are surprised and disappointed by Wal-Mart’s choice to embrace an employer mandate in exchange for a promise of cost savings.”