Wal-Mart Backs Employer Health Insurance Requirement

NU Online News Service, July 1, 2:54 p.m. EDT

WASHINGTON--Wal-Mart, the nation's largest private employer, has told President Obama it would support health care reform legislation requiring businesses to provide employees some level of health insurance coverage.

The company's position on the so-called "employer mandate" was contained in a letter signed by Mike Duke, chairman and CEO of Wal-Mart, as well as 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, a liberal think tank.

In addition a statement issued by the company said, "As health care reform enters the next phase, we came together at this point in the debate to add our combined voices to the momentum building behind reform,We believe the time for comprehensive reform is now. The present system is not sustainable. The status quo is not an option."

John Greene, vice president of congressional affairs for the National Association of Health Insurers, voiced concern over the Wal-Mart decision.

He said he had hoped that Wal-Mart would remain neutral over such a provision. Currently, most large industry trade groups oppose such a mandate.

Mr. Greene said he is concerned about the Wal-Mart decision because he fears supporters of the current legislative proposals being proposed by Democrats in the House and Senate will now argue that since the nation's biggest employer has agreed to do so, "others should follow suit."

"It gives supporters of the legislation being pushed by Democrats in Congress additional reason to push for an employer mandate in final legislation," he said.

NAHU and most employers oppose such a mandate because "it is a job-killer, it depresses wages, and even if such a mandate were to start with a low floor, over time it would increase," Mr. Greene said.

Opponents include the National Retail Federation and the U.S. Chamber of Commerce.

Wal-Mart is seeking an employer mandate that bases how much a company pays for coverage not on the number of employees but on profit per employee.

Such an arrangement would favor companies with many low-wage employees, like Wal-Mart, opponents are saying.

Wal-Mart is offering support of an employer mandate depending on whether Congress offers a guarantee to businesses that health care costs will be contained.

The company is also endorsing the use of a trigger mechanism that automatically would impose reductions if health care spending rose above annual targets.

In voicing support for an employer mandate, the letter signed by Mr. Duke, Mr. Stern and Mr. Podesta said, "We are for shared responsibility."

It added, "Not every business can make the same contributions, but everyone must make some contribution."

"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," said the 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."

The signers said they believe a mandate must be accompanied by provisions that will reduce health costs and dramatically improve the value for the health care dollar.