updated 9/26/2006 7:24:45 PM ET 2006-09-26T23:24:45

Wal-Mart Stores Inc. will stop offering traditional low-deductible health plans for new hires next year in favor of low-premium plans with higher deductibles, a move it says will put more health care money and choices in the hands of its more than 1.3 million U.S. workers.

Union-backed Wal-Mart critics, who made the change public Tuesday based on internal company documents, claimed the nation’s largest private employer was pushing the rising costs of health care onto its workers.

Wal-Mart confirmed to The Associated Press that it will drop traditional plans for new hires from January 1. Those plans offer annual deductibles as low as $350 for a yearly premium of $1,043 for single person coverage.

New hires from next year will only be able to sign up for one of two plans that have premiums as low as $11 a month but annual deductibles starting at $1,000 for most medical expenses as well as separate deductibles for special events, like outpatient treatment, and for prescriptions.

One of the new plans also includes a health savings account, which allows an employee to put money aside tax-free in a special account reserved for health costs.

Wal-Mart’s current employees will still have the option of coverage under the traditional plans, according to the company benefits guide for 2007.

Only 7 percent of companies that provide health coverage currently offer high-deductible plans with a savings option, according to an annual survey released Tuesday by the Kaiser Family Foundation, a health care research organization.

WakeUpWalMart.com said the change meant the retailer was providing worse health coverage because it would be more expensive.

“This sends a terrible message to every responsible corporation that is trying to do the right thing for their employees,” said Paul Blank, campaign director for WakeUpWalMart.com.

Wal-Mart spokesman Dan Fogleman said the change was aimed at helping employees, which it calls associates, after internal surveys showed that half of all workers with company insurance used up less than their full deductible last year.

This meant they were paying more in premiums than they were getting out in benefits, he said.

“They’re paying more than they need to because they’re buying more insurance than they need,” Fogleman said.

Fogleman said Wal-Mart is also trying to help push down the rising costs of health care by leaving more cash in the pockets of its employees. Lower premiums mean more money left to cover the deductibles, the argument goes, and employees will be smart consumers of health care and go where prices are lower.

“The Value Plan meets the needs of the bulk of our associates,” he said.

The Value Plan is a new offering Wal-Mart introduced late last year under fire from unions and other critics, who claim Wal-Mart offers too little health coverage to its workers and pushes them off into taxpayer-supported care.

It starts at $23 a month and includes three doctors visits and three prescriptions for a copay before the annual deductible starting at $1,000 kicks in.

The plan is available for $11 a month in a limited number of areas where Wal-Mart has struck cost-cutting deals with local health care providers. The company says it plans to expand availability of the $11 premium to 40 percent of its work force by the start of next year.

The lower costs plan is one several steps Wal-Mart has taken to improve coverage since an internal corporate memo leaked last October acknowledged the company’s critics were correct to say its health coverage was expensive for low-income families and that a significant portion of employees and their children were on public assistance.

It has also reduced waiting times for part-time workers to enroll and cut the time and cost for enrolling children.

Earlier this year a federal judge tossed out a first-of-its-kind state law that would have required Wal-Mart to spend more on employee health care in Maryland.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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