PRESS RELEASE: JANUARY 10, 2006

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Wal-Mart is the target of health care legislation in 30 U.S. states

Michael Barbaro

NEW YORK: - In a national campaign aimed squarely at Wal-Mart Stores, lawmakers in 30 U.S. states are preparing to introduce legislation that would require large corporations to increase spending on employee health insurance, according to the AFL-CIO, which was to announce the initiative on Thursday.

The legislative push underscores state lawmakers' growing frustration with the progress of changes to U.S. health care and the success of a union effort to turn Wal-Mart into a symbol of everything that is wrong with the system.

In Maryland this year, legislators passed a bill forcing large employers like Wal-Mart to insure more of their workers. The governor vetoed the bill but there appeared to be enough votes for an override in the next few weeks, which would hand unions and their supporters a major victory.

Seizing on momentum from the Maryland bill, lawmakers plan to introduce similar legislation in Connecticut, Kansas, Florida, Colorado and Tennessee, among other states, according to leaders of the AFL-CIO labor federation.

"We know that Congress is not going to take action any time soon," said Naomi Walker, director of state legislative programs at the AFL-CIO. "So states are finding their own way to get at this problem."

The measures are also backed by the Service Employees International and the United Food and Commercial Workers Unions and two union-backed groups: Wal-Mart Watch and Wake Up Wal-Mart.

The bills, some of which are still being drafted, vary but generally stipulate that a state's largest private employers devote 8 percent to 11 percent of their payroll to health insurance or contribute a fee to a state fund. Some require nonprofit organizations to devote slightly less.

None of the bills are explicitly directed at Wal-Mart, but because of its size Wal-Mart is the largest private employer in many states nearly all of them would require the retailer to pay more for employee health care. The Maryland bill, for example, is expected to affect only Wal-Mart.

Lawmakers complain that health insurance remains out of reach for many of Wal-Mart's 1.2 million workers, forcing thousands of them to turn to state-sponsored programs or forgo coverage altogether.

"It is real easy to use Wal-Mart as an example and motivator on this issue," said Representative Terese Berceau, a Wisconsin Democrat and the sponsor of a health insurance bill there.

Wisconsin has found that 4,700 Wal-Mart employees rely on state- sponsored health insurance, the most of any company in the state. But Berceau conceded that the bill was unlikely to pass in the Republican-controlled legislature.

Wal-Mart executives on Wednesday denounced the campaign, saying the company already provides health insurance to nearly half of its employees. This fall, after years of criticism, the company introduced what it said were more affordable benefits, including a plan with $11 monthly premiums. As a result, Wal-Mart said, 70,000 new employees signed up for insurance for 2006, bringing the number covered by the company's plan to 638,000.

"This is just the latest negative attack from Washington union leaders," said Sarah Clark, a Wal-Mart spokeswoman. "These bills will do nothing to address the enormous number of uninsured or control the soaring costs of health care."

Business leaders also criticized the union-backed legislation, contending that it would brand any state that passed it as unfriendly to corporations. "It creates a real disincentive for business to locate in that state," said Randy Johnson of the U.S. Chamber of Commerce.

Representative Marcia Moody, a New Hampshire Democrat, said the legislation she was sponsoring would ultimately help businesses. Her bill, which would require companies with more than 1,500 employees to devote 8 percent of payroll to health insurance, should increase employee productivity, she said.

"They will not be out sick all the time," she said. "A person that has health insurance has stability."

 

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