Wal-Mart’s Vice President sends the Board a memo suggesting the company cut down on the costs of providing health insurance when employees get sick by driving away any employees who could use health insurance:
Redesign benefits and other aspects of the Associate experience, such as job design, to attract a healthier, more productive workforce…Decrease cross-subsidization of spouses through higher premiums or other charges…[life insurance] is also a high-satisfaction, low-importance benefit, which suggests an opportunity to trim the offering without substantial impact on Associate satisfaction…reducing the number of labor hours per store, increasing the percentage of part-time Associates in the stores, and increasing the number of hours per Associate…Wal-Mart should seek to attract a healthier workforce. The first recommendation in this section, moving all Associates to consumer-driven health plans, will help achieve this goal because these plans are more attractive to healthier Associates. The team is also considering additional initiatives to support this objective, including: Design all jobs to include some physical activity (e.g., all cashiers do some cart gathering…It will be far easier to attract and retain a healthier workforce than it will be to change behavior in an existing one. These moves would also dissuade unhealthy people from coming to Wal-Mart.
Put simply, Wal-Mart’s strategy is one of cost-cutting through squeezing workers out of full-time work and discrimination against qualified applicants. As Jacob Hacker writes:
what this memo makes clear is that Wal-Mart’s recently touted effort to “upgrade” its health plan ultimately amounts to a gutting of the very concept of health insurance…how to deal with these exploding costs? In a nutshell, get rid of “cross-subsidization” (yes, the memo actually uses the word) — of spouses, of the old, of the sick. Newman points out that this may be grounds for an ADA suit. But equally important, it is a view totally at odds with the concept of insurance. Insurance, after all, is all about cross-subsidies
This comes after a weekend Wal-Mart devoted to pitching itself as a progressive employer. Tough sell there.