Image: Wal-Mart employees
Ryan Remiorz  /  AP
Wal-Mart employees Robert Dion, left, and Jean-Philippe Barrere collect shopping carts in front of the store in Brossard, Quebec.
updated 1/22/2008 6:04:45 PM ET 2008-01-22T23:04:45

Wal-Mart Stores Inc. said Tuesday the number of employees covered under its health insurance crept past 50 percent for the first time in recent reporting, after criticism by union-backed groups focused on its benefits package.

The world's largest retailer said 50.2 percent of eligible employees accepted health care coverage for 2008, up from 43 percent in 2005. However, the Bentonville-based company acknowledged 9.7 percent of its employees reported receiving government health care coverage.

Wal-Mart said only 7.3 percent of its workers reported being uninsured, down from 9.6 percent the year before. The company said about 1 million of Wal-Mart's 1.3 million full-time and part-time workers in the U.S. were eligible for health care benefits during its last enrollment period.

Linda Dillman, an executive vice president of benefits and risk management for Wal-Mart, told reporters on a conference call Tuesday that the increased enrollment likely came from the company's new health care plan. The plan, which allows employees to customize their coverage, includes premiums as low as $5 a month and access to $4 prescription drugs.

"Everybody in this company is on the same set of plans," Dillman said. Wal-Mart president and CEO "Lee Scott made the same selection the newest part-time cashier at Wal-Mart did."

Union-led groups have claimed that Wal-Mart skimps on benefits. An internal company memo leaked to unions and the media in October 2005 conceded that the company was vulnerable to criticism because its health plans at the time were expensive for low-income workers with families.

Since then, Wal-Mart has shortened its eligibility period, allowed part-time workers to cover children, lowered premiums and lowered copays for prescription drugs. Scott and other Wal-Mart executives even joined with union leaders last year in calling for "quality, affordable" health care for every American by 2012. Neither side offered any specific proposals, however.

Meghan Scott, a spokeswoman for union-backed WakeUpWalMart.com, described the retailer's health care plan as one "only a well-compensated CEO could love," noting its deductibles can reach to $2,000 for the $5-a-month plan. Another union group, Wal-Mart Watch, also issued a statement criticizing the plans' high deductibles.

Wal-Mart's announcement that it covers half of its employees puts it above average among other retailers. Across the nation, retailers as a whole see about 44 percent of their work force covered by company health plans, according to a study by the Kaiser Family Foundation. The study concluded 57 percent of retailers' workers were eligible for coverage, whereas three-fourths of Wal-Mart employees could take the coverage.

The company said a survey of more than 802,000 employees in November showed 22.3 percent of workers were covered under a spouse's policy. Others received coverage from parents, schools, previous employers or personal policies.

State lawmakers have criticized Wal-Mart for allowing its workers to take part of state-funded health care for the poor. A confidential 2006 state study in Washington state showed Wal-Mart had 3,194 workers on Medicaid and the state's Basic Health Plan, more than any other private employer.

Dillman said the retailer had seen a slight drop-off in the number of employees saying they took part in state-sponsored health care coverage, but said the percentages stayed roughly the same.

"We did get some movement off of the plan, but we didn't see much change in terms of the total percentage," Dillman said.

Wal-Mart shares rose $1.62, or 3.41 percent, to $49.20 Tuesday.

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