Why Is Wal-Mart Endorsing Employer Mandated Healthcare?

Wal-Mart and the Service Employees International Union (SEIU) sent a joint letter to President Obama on Tuesday telling him they endorse requiring large companies to provide health insurance for employees. My first response after reading an article in the New York Times about the Wal-Mart/SEIU letter is not printable. However, I will give you the PG version: What the heck?!

I am not surprised that Wal-Mart teamed up with SEIU because in 2007 Wal-Mart and SEIU took part in a campaigned called “Better Health Care Together.” The goal of the campaign was to extend healthcare coverage to all Americans by 2012. I am surprised that Wal-Mart is endorsing an employer mandate.

Let me give you a few facts about Wal-Mart before I proceed with this article. Wal-Mart is the largest private employer in the U.S. with 1.4 million employees. According to the NY Times article, 53 percent of its employees are currently insured through the company, all together, 94 percent have some insurance- including 36,000 employees who receive Medicaid. Wal-Mart Stores Inc. is the world’s largest retailer.

Now back to my regularly scheduled article. Leslie Dach, Wal-Mart’s top lobbyist who met with White House chief of staff, Rahm Emanuel on Tuesday, said, “We’re for an employer mandate, but we believe that it has to be accompanied by these measures that are really going to deliver on the savings. If any business is going to be asked to take on an employer mandate, to face changes in the tax laws, there should be some sense that the promise of the bill to reduce health costs will actually occur.”

The letter stated that Wal-Mart and SEIU are for an employer mandate “which is fair and broad in its coverage.” The letter also said, “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.”

Ezra Klein of the Washington Post interviewed Wal-Mart spokesperson, David Tovar. When Klein asked him why Wal-Mart endorses an employer mandate, he answered:

“We understand that others may have different opinions. Others in the business community may have different opinions. But for our business, this is the right thing to do. Every associate can become eligible for health care at Wal-Mart. And we think that a mandate, coupled with this trigger mechanism and other cost-savings measures, will eliminate waste and increase competitiveness.”

Klein pressed Tovar for more of an answer, by asking why Wal-Mart endorses an employer mandate rather than “a plan that dissolves the employer market entirely?” Tovar responded with a very vague answer: “Look, this is the position that we took. We wanted to be part of the solution. We wanted to lend our voices to the momentum behind reform.”

Tovar defended Wal-Mart’s insistence that a “trigger mechanism,” enacting cuts if costs are not kept down, by saying, “If we're going to agree to this type of mandate, we have to have that fail-safe, which is the trigger.”