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  1. #1
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    sojustask is offline The Late, Great Lady Mod - Retired User Rank
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    Maryland Sets a Health Cost for Wal-Mart

    With all the profits these large employers make, the least they could do is spend 8% of them on employee health benefits. Smaller companies do, these large ones should too.
    *********************************************


    Maryland Sets a Health Cost for Wal-Mart
    By MICHAEL BARBARO

    ANNAPOLIS, Md., Jan. 12 - The Maryland legislature passed a law Thursday that would require Wal-Mart Stores to increase spending on employee health insurance, a measure that is expected to be a model for other states.

    The legislature's move, which overrode a veto by Gov. Robert L. Ehrlich, was a response to growing criticism that Wal-Mart, the nation's largest private employer, has skimped on benefits and shifted health costs to state governments.

    The vote came after a furious lobbying battle by Wal-Mart and by labor and liberal groups, and is likely to encourage lawmakers in dozens of other states who are considering similar legislation.

    Many state legislatures have looked to Maryland as a test case, as they face fast-rising Medicaid costs, and Wal-Mart's critics say that too many of its employees have been forced to turn to Medicaid.

    Under the Maryland law, employers with 10,000 or more workers in the state must spend at least 8 percent of their payrolls on health insurance, or else pay the difference into a state Medicaid fund.

    A Wal-Mart spokeswoman said the company was "weighing its options," including a lawsuit to challenge the law because it is close to that 8 percent threshold already.

    It is unclear how much the new law will cost Wal-Mart in Maryland - or around the country, if similar laws are adopted, because Wal-Mart has not publicly divulged what it spends on health care.

    But it was concerned enough about the bill to hire four firms to lobby the legislature intensely over the last two months, and contributed at least $4,000 to the re-election campaign of Governor Ehrlich.


    A spokeswoman for Wal-Mart, Mia Masten, said that "everyone should have access to affordable health insurance, but this legislation does nothing to accomplish this goal."

    "This is about partisan politics," she said, "and this is poor public policy driven by special-interest groups." (And we are to believe that Wal-Mart spending money on lobbyists or contributing to a re-election campaign was not in the spirit of "special interest"?)

    There are four employers in Maryland with more than 10,000 workers - among them, Johns Hopkins University, the grocery chain Giant Food and the military contractor Northrop Grumman, but only Wal-Mart falls below the 8 percent threshold on health care spending.

    A Democratic lawmaker who sponsored the legislation, State Senator Gloria G. Lawlah , maintained: "This is not a Wal-Mart bill, it's a Medicaid bill." This bill says to the conglomerates, 'Don't dump the employees that you refuse to insure into our Medicaid systems.' "

    Opponents said the law would open the door for broader state regulation of health care spending by private companies and would send the message that Maryland is antibusiness.

    "The message is, 'Don't come here,' " said Senator E. J. Pipkin, a Republican. "This is an anti-jobs bill."

    Several lawmakers said that in the end, the law would require Wal-Mart to spend only slightly more than it does now on health insurance. But with Wal-Mart refusing to disclose what it pays for health costs, it was unclear how much more it would be required to pay.

    This is the second time that the Maryland legislature, which is dominated by Democrats, has passed the Wal-Mart bill. Governor Ehrlich vetoed it late last year, inviting a senior Wal-Mart executive to sit by his side as he did so.

    Indeed, the bill is shaping up as an issue in the fall campaign, with Republicans and their business allies lining up against it, and Democrats and their labor union supporters backing it. Wal-Mart has 53 stores and employs about 17,000 people in Maryland.

    Debate was particularly emotional among representatives from Maryland's Eastern Shore, where Wal-Mart recently announced plans to build a distribution center that would employ up to 1,000.

    Wal-Mart executives have strongly suggested that they might build the center elsewhere if lawmakers passed the health care bill.

    In a passionate speech in the State Senate, J. Lowell Stoltzfus, a Republican, warned that the bill "jeopardizes good employment for my people."

    "It's going to hurt us very bad," he added,

    The bill's passage underscored the success of the union campaign to turn Wal-Mart into a symbol of what is wrong in the American health care system.

    Wal-Mart has come under severe criticism because it insures less than half its United States work force and because its employees routinely show up, in larger numbers than employees of other retailers, on state Medicaid rolls.

    In response to the complaints, the company introduced a new health care plan late last year, with premiums as low as $11 a month.

    Consumer advocates specializing in health care are hoping that the Maryland law will be the first of many.

    "You're going to see similar legislation being introduced," said Ronald Pollack, executive director of Families USA, a nonprofit health advocacy organization, "and debated in at least three dozen more states, and at least some of those states will end up also requiring large employers to provide health care coverage."

    Mr. Pollack suggested that he did not expect any groundswell of opposition from corporate America. Most companies, he said, provide insurance and know that the costs of medical treatment for uninsured people are reflected in their insurance premiums. Mr. Pollack said that, by his organization's calculations, the cost of such treatment drove up employer premiums by $922 a family last year. In 2006, he said, the added cost could reach $1,000 a family.

    "Those employers should welcome the fact that the companies that do not offer coverage now will be forced to step up to the plate," he said.

    State lawmakers here in Annapolis took repeated swipes at Wal-Mart during debate over the bill on Thursday. It appeared that the company's intensive lobbying campaign in Maryland, including advertisements arguing that the requirement would hurt small businesses, might have soured some lawmakers.

    Senator Lawlah called the lobbying "horrendous" and adding, "I have never seen anything like it."

    Frank D. Boston III, the chief lobbyist for Wal-Mart on the health care bill, stood in the main corridor of the Capitol building on Thursday wearing a look of resignation. Referring to unions in the state, he said, "They have a power we can't match, and we worked this bill extremely hard."

    Class-Action Case in Pennsylvania

    By Bloomberg News

    A Pennsylvania judge granted class-action status yesterday to a lawsuit contending that Wal-Mart employees had been pressed to work through breaks and after hours.

    The suit could include as many as 150,000 current or former employees in Pennsylvania who have worked at a Wal-Mart store or at the company's Sam's Club warehouse chain since March 1998, Michael Donovan, the lead plaintiff's lawyer, said.

    The latest class-action filing against Wal-Mart came after a California jury last month awarded workers $172.3 million in another off-the-clock case.

    Wal-Mart is appealing. The company settled a similar case in Colorado for $50 million.

    Wal-Mart has given "every indication" that it will go to trial rather than settle, Mr. Donovan said. A Wal-Mart spokesman, Kevin Thornton, said the company was considering appealing the decision.

    Claudia H. Deutsch contributed reporting from New York for this article.

  2. #2
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    Re: Maryland Sets a Health Cost for Wal-Mart

    Quote Originally Posted by sojustask
    With all the profits these large employers make, the least they could do is spend 8% of them on employee health benefits. Smaller companies do, these large ones should too.
    *********************************************
    I do not disagree with your opinion that employers should take care of there employees, especially ones that turn nice profits year after year.

    I disagree that the government should mandate what percentage of profits, gross sales, or payroll expense should be spent on it.

    What happens if.....

    I negotiate a "cherry" deal with an insurance provider that allows my company to provide excellent benefits yet keeps my company below the 8% figure mandated by the government?

    Before anyone says that is not going to happen, I am simply asking the question "what if".

    I believe a better law would be to require the companies to pay a Medicaid Fee relative to the number of employees they have who are on Medicaid. Base the fee on companies over 100 employees instead of 10,000.

    That type of law would affect almost every decent sized company and force companies to either pay the government to cover their employees or negotiate deals with insurance providers to cover their employees. This is, in my opinion, the way to get health care cost under control. Instead of it insurance being a deal where the provider says this is the price take it or leave it, the insuracnce companies would then be put into a position where they had to work on their costs.

    I think we can all agree that providing the ability to receive health care is important. Do we really care if it is the government or a private carrier who is providing the insurance coverage? If we don't, then it would not matter if Medicaid is being paid a fee to provide it or if a private carrier is being paid.

  3. #3
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    sojustask is offline The Late, Great Lady Mod - Retired User Rank
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    Re: Maryland Sets a Health Cost for Wal-Mart

    Quote Originally Posted by RegulationE
    I do not disagree with your opinion that employers should take care of there employees, especially ones that turn nice profits year after year.

    I disagree that the government should mandate what percentage of profits, gross sales, or payroll expense should be spent on it.

    What happens if.....

    I negotiate a "cherry" deal with an insurance provider that allows my company to provide excellent benefits yet keeps my company below the 8% figure mandated by the government?

    Before anyone says that is not going to happen, I am simply asking the question "what if".

    I believe a better law would be to require the companies to pay a Medicaid Fee relative to the number of employees they have who are on Medicaid. Base the fee on companies over 100 employees instead of 10,000.

    That type of law would affect almost every decent sized company and force companies to either pay the government to cover their employees or negotiate deals with insurance providers to cover their employees. This is, in my opinion, the way to get health care cost under control. Instead of it insurance being a deal where the provider says this is the price take it or leave it, the insuracnce companies would then be put into a position where they had to work on their costs.

    I think we can all agree that providing the ability to receive health care is important. Do we really care if it is the government or a private carrier who is providing the insurance coverage? If we don't, then it would not matter if Medicaid is being paid a fee to provide it or if a private carrier is being paid.
    That makes sense too but what do you think would be a fair percentage for those employers to pay on a Medicaid fee? If they would set that at an 8% fee or provide comparable coverage for their employees, that would encourage employers to find "cherry" deals or pay the 8% wouldn't it?

    Is that what you are suggesting?

    Lady Mod

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    Re: Maryland Sets a Health Cost for Wal-Mart

    Quote Originally Posted by sojustask
    That makes sense too but what do you think would be a fair percentage for those employers to pay on a Medicaid fee? If they would set that at an 8% fee or provide comparable coverage for their employees, that would encourage employers to find "cherry" deals or pay the 8% wouldn't it?

    Is that what you are suggesting?

    Lady Mod
    I am suggesting figuring out what the average percentage is of employees on Medicaid for companies between say 100 and 1000 employees, 1001 and 5000 employees, 5001 and 10000 employess, and 10,0001 and above employees.

    Say you have 10,001 employees and the the average is 5% of a workforce is on Medicaid. Your 10,001 employee company would then qualify to have 501 employees on Medicaid. Any number above that, the company would have to reimburse Medicaid for 100% of the expenses to cover the remaining employees.

    This may end up costing them 5% of their revenue or it may end up costing them 80% of the revenue. There will be a number where it is cheaper for the employer to provide health insurance then it is to reimburse Medicaid for its costs. If you require the company to pay 100% of the expenses incurred by Medicaid for even a single employee over the allotted number, they will quickly find it more affordable to provide health care coverage.

    Monitoring this system would increase costs, but that would be offset by the companies who have to pay for extra employees. The cost of not providing health care for employees needs to me much more then the cost to provide it if we are ever to expect the companies to provide health care coverage.

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    sojustask's Avatar
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    Re: Maryland Sets a Health Cost for Wal-Mart

    Quote Originally Posted by RegulationE

    Say you have 10,001 employees and the the average is 5% of a workforce is on Medicaid. Your 10,001 employee company would then qualify to have 501 employees on Medicaid. Any number above that, the company would have to reimburse Medicaid for 100% of the expenses to cover the remaining employees.
    Wouldn't that somehow lead to discrimination against hiring people who may be on Medicaid? Or against companies who have a lot of jobs but at the lower end of the pay scale?

    Lady Mod

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    Re: Maryland Sets a Health Cost for Wal-Mart

    Quote Originally Posted by sojustask
    Wouldn't that somehow lead to discrimination against hiring people who may be on Medicaid? Or against companies who have a lot of jobs but at the lower end of the pay scale?

    Lady Mod
    Hiring someone who is on Medicaid would not factor in unless your company did not provide them with Insurance. Aside from that, asking what type of health insurance coverage they have is not a proper question and would get them sued pretty quick. It would have nothing to do with their ability to do the job in question and would fall under the same laws that keep an employer from asking if you have a car, how old you are, where you go to church, etc.

    If the company wants to pay less then a livable wage, they will at least have to pay for the health care. Looks like a win-win to me. Less pay, but full medical benefits or less pay and no medical benefits....hmmmmm.....wonder where most people would choose to work?

    It is the Wal-Mart type employers that tend to pay less and give fewer benefits so a law such as the one I suggest would truly be going after Wal-mart types that can afford to pay for health insurance.

    It is not be unthinkable that companies with 100 to 1000 employees may have an average of 40% of the employees on Medicaid. Since this would be the average for that size business they would fall under a different catagory then a Wal-Mart type business.

    My thoughts on this where formed in less then 5 minutes, but given some time I could come up with a loop hole free scenerio that would work for all size businesses.

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