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Life Health > Health Insurance > Life Insurance Strategies

Large-Employer Coverage Bills

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Reports of the death of the so-called “Wal-Mart” health care bills may have been somewhat exaggerated, health policy experts say.

Although advocates of the bills have suffered setbacks in recent weeks, lawmakers may continue to introduce and reintroduce new versions of the bills for years to come, says Janice Kupiec, director of state affairs at the National Association of Health Underwriters, Arlington, Va.

“People may keep at it,” Kupiec says.

The Wal-Mart bills are bills that would require all large employers in a state to provide health coverage to all employees, or else pay the state a tax or fee.

Unions, consumer groups and other advocates are calling the bills “fair share” bills and employer groups are calling the bills “employer mandate” bills.

But Wake-Up Wal-Mart, a group affiliated with the United Food and Commercial Workers International Union, Washington, that is helping to spearhead a campaign to introduce the large-employer coverage bills in more than 30 states, is focusing on Wal-Mart Stores Inc., Bentonville, Ark., on its website. And the labor market in some states, such as Maryland, is structured in such a way that the large-employer mandate bills apply only to Wal-Mart.

Bill advocates frightened the employer groups in January, by persuading Maryland lawmakers to pass the Maryland large-employer coverage bill, H.B. 1284, over the veto of Gov. Robert Ehrlich.

Since then, employer groups such as the Retail Industry Leaders Association, Washington, and the National Federation of Independent Business, Nashville, Tenn., seem to have succeeded at killing the large-employer coverage bills in Colorado, New Hampshire and Washington.

RILA has sued to block the Maryland large-employer coverage law in the U.S. District Court in Baltimore. RILA is arguing the law violates the Employee Retirement Income Security Act, which preempts state regulation of employee benefit plans.

“The tide is beginning to turn in this debate,” RILA President Sandy Kennedy says in a statement. “State policymakers are seeing through the union smokescreen and recognize these laws for what they: Terrible public policy that does nothing to address real health care challenges.”

But Maryland lawmakers now are debating H.B. 1510, a bill that would require all employers with more than 1,000 employees to spend at least 4.5% of payroll on health care.

At press time, Florida, New Jersey and New York had just started considering their large-employer coverage bills, and large-employer coverage measures could surface as ballot initiatives in Oregon and Washington, Kupiec says.

Even if all or most of the remaining large-employer coverage bills die, lawmakers could keep resurrecting them for years to come, she says.

Kupiec says she is keeping an especially close eye on states’ efforts to count the number of Medicaid and Children’s Health Insurance Program plan members in households with at least one adult who works for a large employer.

Unions got the idea of attacking Wal-Mart in part because it showed up at or near the top of some states’ rankings of employers of employed beneficiaries of Medicaid and CHIP plans.

In Massachusetts, for example, a state study shows that 6,146 Wal-Mart workers and Wal-Mart worker dependents get health coverage from Medicaid and CHIP plans. Wal-Mart is the employer of more working Medicaid and CHIP plan members than any other employer in the state.

The New Jersey Senate voted 36-0 in February for S. 539, a bill that would require the New Jersey human services commissioner to identify companies that employ large numbers of residents who get coverage through NJ FamilyCare, New Jersey’s CHIP plan.

The state rankings could be misleading: Some residents may have had Medicaid coverage early in the year and lost it later in the year when they began working for the employers listed. Other residents may be in transitional programs for recent welfare alumni or other special groups.

But state lawmakers’ interest in identifying employers with large number of employees receiving public health benefits bears close attention, Kupiec says. “I don’t think that’s going to go away.”

The UFCW and other groups promoting the large-employer coverage bills, such as the AFL-CIO and the Service Employees International Union, both of Washington, say giant employers should provide health coverage for employees because it’s the right thing to do.

“In our America, corporations live up to their responsibility and provide their employees with adequate and affordable health care coverage,” says Wake-Up Wal-Mart.

Roughly 7% of workers at employers with more than 100 employees have no health coverage at all, according to a study cited by Wake-Up Wal-Mart.

The UFCW and the SEIU recently broke away from the AFL-CIO.

Edmund Haislmaier, a health policy lobbyist, has speculated in an analysis for the Heritage Foundation, Washington, a conservative think thank, that unions may be trying to use the large-employer coverage campaign to show that they can outlobby one another.

A Wal-Mart spokesman declined to be interviewed for this article.

In February, Wal-Mart CEO Lee Scott criticized the large-employer coverage bills, but assured members of the National Governors Association, Washington, that he takes concerns about health benefits seriously.

“We need solutions that make health care more affordable and accessible,” Scott said.

Wal-Mart is addressing the needs of uninsured employees, Scott said, by cutting the waiting period for part-time employees to become eligible for company health coverage to 6 months; expanding access to a plan that comes with a $1,000 deductible but costs only $11 per month for individuals; and designating all children of part-time Wal-Mart employees eligible for health coverage as soon as their parent becomes eligible.

NAHU opposes the idea of state mandates on principle, but it has not taken an official stand on the bills because it does not take positions on state bills.

America’s Health Insurance Plans, Washington, has not taken an official position, either. “We’re simply monitoring the status of the legislation as it pops up,” says AHIP spokesman Larry Akey.

The debate about the bill is of less interest to AHIP members than it might otherwise be because most of the employers directly affected by the bills are large, self-insured employers, Akey says.

Vince Phillips, a lobbyist for the Pennsylvania Association of Health Underwriters, Mechanicsburg, Pa., suggests in a recent PAHU newsletter that the unions are attacking the wrong enemy. He says the real problem is the high cost of health insurance.

Gerard Anderson, a public health professor at Johns Hopkins University, has testified on Capitol Hill that the real problem plaguing the U.S. health finance system is high health care prices. Although U.S. residents get less health care than residents of many other developed countries, total expenditures are higher here because our care costs more than twice as much, Anderson told members of the health subcommittee of the U.S. Energy and Commerce Committee.

But benefits brokers interviewed are convinced that state benefits mandates are contributing to the problem of high coverage costs and increasing numbers of uninsured workers.

The brokers emphasized that employees of small companies are far less likely to have health coverage than employees of the corporate giants.

In Massachusetts, thanks to mandates, “your choice of plans is a Cadillac, a Cadillac or a Cadillac,” says Paul Rooney, president of EBS Insurance Brokers Inc., Newton, Mass.

Rooney says he can sell a limited-benefit health plan in Massachusetts that provides just a few thousand dollars of coverage, but he cannot sell a low-cost, high-quality major medical plan that leaves out coverage for in vitro fertilization.

In Maryland, the percentage of groups with 2 to 50 employees that have coverage is dropping because employers can wait till an employee develops a major illness, then buy coverage that will take effect within 2 to 4 weeks, says Lawrence Ulvila Jr., president of Insurance Solutions Inc., Annapolis, Md.

“When your barn is on fire, that’s not when you’re supposed to buy insurance,” Ulvila says.

The brokers interviewed fear that the large-employer coverage mandates will set states on a slippery slope toward trying to provide government-run health coverage, and they say mandates in some states already have eliminated so much competition that 1 or 2 private carriers now control the market.

Sam Fleet, president of National Employee Benefit Companies Inc., Warwick, R.I., scoffs at the idea of state governments or the federal government running a successful universal public health system.

“Let’s go to the registry of motor vehicles and buy our health insurance,” Fleet jokes. “‘You’re number 281 in line. Good luck with your colonoscopy.’”

But Rooney says he believes the current debate in Massachusetts is less bitter than the health maintenance organization debates of the late 1990s.

The unions have organized heated public relations campaigns in support of the large-employer coverage bills. UFCW members, for example, dressed up in Halloween costumes in October 2005 and notified the media that they were selling candy to raise money for uninsured Wal-Mart employees.

But, back in the 1990s, politicians “would get on the stump and kick the hell out of the HMOs,” Rooney says.

Today, both employers and employees seem to have a better understanding of the pressures health insurers and HMOs face, Rooney says.

Brokers interviewed warn colleagues who have an opinion about the large-employer coverage bills against expecting national insurance groups to do the lobbying. The involvement of national organizations could backfire, they say.

Instead, Ulvila says, brokers who want to have a say on the bills should enlist support at home. “You’ve got to get a real grassroots effort going and include your clients.”

In the long run, the best solution might be supporting laws and regulations that encourage carriers and employers to offer a wider range of benefits, to appeal to younger workers as well as older workers, Fleet says.


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