The Herald, Sharon, Pa.

Business

July 1, 2009

Wal-Mart backs insurance mandate

WASHINGTON (AP) — Wal-Mart, a huge company once criticized for less than generous employee benefits, has embraced President Barack Obama’s call for requiring all large employers to offer health insurance to their workers.

The move, joined by a major labor union that sometimes assails Wal-Mart, could add momentum to Obama’s push for far-reaching changes to the nation’s health care system, which Congress is weighing.

Wal-Mart, the nation’s largest private employer, announced its position in a letter to congressional and administration officials Tuesday.

“We are for an employer mandate which is fair and broad in its coverage,” the letter said. “Any alternative to an employer mandate should not create barriers to hiring entry-level employees.”

That was a reference to some proposals in Congress to have employers pay the Medicaid costs of new hires. Critics say that would discourage the hiring of low-income people.

The letter was also signed by Andrew L. Stern, president of the Service Employees International Union, which has more than a million members and counts more U.S. health workers than any other union. Also signing it was John Podesta, who headed Obama’s transition team and is president of the Center for American Progress.

The letter could give a push to two efforts: Wal-Mart’s bid to improve its image regarding worker treatment, and Obama’s plan to change the nation’s health care system, including insuring virtually all Americans and controlling costs.

In recent years, SEIU and others have criticized Wal-Mart for charging relatively high premiums to its employees for health insurance, and forcing them to wait up to two years for coverage.

Wal-Mart recently said that 94 percent of its employees now have insurance, either through the company or a family member.

The company has a legacy of backing conservative politicians and demanding strict efficiencies in every aspect of its business, including employee benefits. It has tried to improve employee relations in recent years, and has hired some prominent Democrats to broaden its political base.

One of those, executive vice president Leslie Dach, said Wal-Mart feels the current U.S. health care system is unsustainable, and an employer insurance mandate is a cost that businesses should accept.

The letter suggested that Wal-Mart’s and SEIU’s enthusiasm for an employer mandate might wane if the final legislation does not also include a mechanism to ensure cuts in the cost of delivering health care. “Support for a mandate also requires the strongest possible commitment to rein in health care costs,” it said.

Former Senate Democratic Leader Thomas Daschle and others have proposed a federal commission with powers to impose Medicare cost reductions, among other things, if overall health delivery costs do not reach certain targets in a given time. The letter endorsed Daschle’s efforts.

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