It's easy to beat up on Wal-Mart from an "employer of choice" perspective. They churn through employees, use as much part-time labor as possible to keep total costs down, and generally haven't offered much in the way of benefits for their workforce.
For a great rundown of the historic attitude towards employee benefits at Wal-Mart, take a look at this memo. It's a confidential memo that was leaked out from a board meeting in 2005, when a VP of Benefits gave a "state of the state" address on benefit costs to the Wal-Mart board. If you haven't read this before, it's a must-read. Among the brainstorming to keep health care costs down in 2005? To discourage unhealthy job applicants, the VP of Benefits suggests that Wal-Mart arrange for "all jobs to include some physical activity" (e.g., all cashiers do some cart-gathering). Seeing that in print makes me say, "yikes"...
But change is underway, and Wal-Mart is attempting to position itself as "kinder and gentler" to
employees.
First, the good news. Multiple media outlets recently reported that Wal-Mart is improving the benefits they will offer employees in 2008. Looks like Consumer-based plans will rule the day, with Wal-Mart indicating it would give each employee or family that signs up for coverage a grant of $100 to $500 to defray health expenses, while charging premiums as low as $5 a month. The new program, for which workers can sign up starting this month, offers 50 ways to customize coverage with varying trade-offs like higher premiums and lower deductibles.
In one plan, for example, an employee would pay premiums up to $79 a month, receive a health care credit of $100 and pay a deductible of $500. In another, the employee would pay premiums of $8 a month, receive a $100 health care credit, but pay a deductible of $2,000. Though many generic drugs will be available for $4, brand-name drugs will cost $30 to $50.
About half of Wal-Mart workers have coverage from the company, while 40 percent more get their coverage elsewhere — through a spouse, a parent, a second job or a state program like Medicaid. About 10 percent have no health coverage.
Now for the bad news. While the plan is a positive move, it doesn't go far enough. The biggest limitation? Waiting Periods. Full-time employees must still wait 6 months to be eligible for coverage, and part-timers must wait one year for coverage. While it's easy to pile on Wal-Mart for the one year requirement for coverage for part-timers, the reality is many companies don't offer benefits for part-timers (it would be interesting to see the number of hours a week on average required for eligibility).
I'm more focused on the full-time equation. If Wal-Mart would move the eligibility mark to one month for full-timers, they'd limit the majority of what's left to criticize.
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