Shifting health insurance expense

BY KATIE MERX
FREE PRESS BUSINESS WRITER

Michigan could save $100 million a year if it adopted a law similar to one Maryland passed earlier this month that forces Wal-Mart to pay more for its employee health care, proponents of that legislation said.

The Maryland General Assembly approved a bill that requires employers with more than 10,000 workers to spend at least 8% of their payroll on employee health care or pay into a fund for the uninsured. The Maryland bill only affects Wal-Mart Stores Inc.

Michigan State Sen. Ray Basham, D-Taylor, introduced a similar Fair Share Health Care bill in Michigan in September. And buoyed by the success in Maryland, he's pushing anew for the Senate Committee on Commerce and Labor to take up the measure.

Basham said the proposal would save Michigan taxpayers money and result in workers receiving more generous health benefits from large employers.

In Michigan, 18 employers, including Wal-Mart, have more than 10,000 workers, said Ken Fletcher, legislative director for the AFL-CIO in Michigan.

"Of the 18 corporations in Michigan with more than 10,000 employees, four have double-digit percentages of employees on Medicaid," Fletcher said.

"They're abusing the system," Basham said.

Wal-Mart and business advocacy groups such as the Michigan Chamber of Commerce vehemently oppose such government mandates and plan to fight them. Opponents say the proposed legislation does nothing to improve health coverage for workers and is simply an effort to attack businesses that have convinced their workers not to unionize.

The AFL-CIO is helping to coordinating Fair Share Health Care actions nationwide.

Political analysts say passage of the bill in Michigan is a long shot, given the state's tough economic climate. But, they said, the state's taxpayers can expect to hear a lot of debate in the coming months about who should pay for health care as the state struggles to pay for its $2.8-billion Medicaid program and businesses buckle under the rising cost of health insurance.

Businesspeople such as Bill Largent, president of Farmington Hills consultancy the Dibaa Group, said raising the level of discussion is a good thing and he says debate over the Fair Share bill "will yield something positive."

"I fundamentally oppose mandates," Largent said. "Having said that, externalizing your costs is not a good way to do business."

Mark Mitra, who operates four Arby's roast beef restaurant franchises in Wayne and Oakland counties, said he'd like to see health care become a joint responsibility of employees, employers, government and health care systems. Mitra offers health care to his managers and his Wayne County employees. He offers the Wayne County employees a health plan because he uses the Wayne County-sponsored three-share program in which the county, employer and employee pay equal shares toward the monthly premium. He wasn't aware of a similar program that was available to his Oakland County employees.

"Unfortunately, health care in this country is becoming a luxury," said Mitra. "I believe that in a country with our rich resources, it should be accessible to everyone. ... However, mandating the amount an employer has to pay could drive many employers out of business."

But Basham, the AFL-CIO and Fair Share bill co-sponsors point out that the bill would only target the state's very largest employers. They believe it would result in lower costs for state residents and more health benefits for workers.

The bill's co-sponsors include state senate Democrats Irma Clark-Coleman, Gilda Jacobs, Samuel Thomas III, Martha Scott, Liz Brater and Hansen Clarke.

Basham argues that Wal-Mart and some other large employers skimp on health coverage, leaving taxpayers -- who fund Medicaid -- to foot the bill for their employees. Basham said that is unfair to taxpayers and large retailers who provide more generous health benefits.

Wal-Mart employs about 30,000 Michiganders. The average full-time, hourly Michigan Wal-Mart worker makes $9.87 per hour, according to Wal-Mart's Web site.

Wal-Mart, the world's largest retailer, reports that more than 615,000 of the company's 1.3 million workers are covered by Wal-Mart health plans.

Wal-Mart says it plans to challenge the Maryland law and fight passage of similar laws under consideration in more than 30 other states, including Michigan.

Wal-Mart Stores Senior Public Affairs Manager Nate Hurst said the company hopes other state legislatures will realize that the fair share health care bills are harmful to working families and drop the actions.

"These fair share health care bills do nothing to help the nation's uninsured nor control the rising cost of health care in this country," Hurst said. "They will cost jobs and hurt economic growth."