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Harrisburg - Pennsylvania, like most states, has rolled out the red carpet for Wal-Mart, offering up millions in tax incentives and grants over the last decade to reel in the retail giant.
In return, Wal-Mart Stores Inc. has delivered jobs - 40,000 of them - making it the largest private employer in the state. But critics say the jobs have come with a hidden cost: An unusually high percentage of Wal-Mart workers do not have company-paid health insurance, leaving them to rely on taxpayer-subsidized care.
Nobody knows how much such workers cost Pennsylvania taxpayers, although several Democratic lawmakers claim it could be as much as $30 million a year. The lawmakers, joining a well-financed national campaign led by labor unions, have proposed legislation to get an exact answer.
The bill would require Pennsylvania companies with 20 or more employees to issue annual reports stating how many of them are receiving Medical Assistance. The bill is the first step, sponsors say, toward mandating that large companies pay their fair share of health-care costs.
"Wal-Mart is the most notorious abuser of Medical Assistance programs nationwide based on states that have done studies," said Rep. Mike Veon (D., Beaver), a cosponsor of the bill. "We need to find a way to encourage or require employers to provide affordable health-care insurance."
Wal-Mart defends its health-benefits program. The company, based in Bentonville, Ark., says it covers health care for more than half its employees, and opens a route off state Medicaid rolls.
"It's important to note that Wal-Mart is providing access to health care that people didn't receive before they came to us," spokesman Dan Fogleman said.
Other states already have taken the next legislative step. In April, the Maryland General Assembly approved a bill requiring companies employing more than 10,000 people to spend 8 percent of profits made in the state on health care. Only Wal-Mart qualifies under the bill, which the Republican governor has vowed to veto.
In New Jersey, Assemblyman Louis Greenwald (D., Camden) introduced a bill on Thursday that would require employers with more than 10,000 workers to increase the level of their health-care coverage or pay an additional $2.45 per worker hour into the state's Medicaid program. The target: Wal-Mart, which employs 12,000 people in New Jersey.
"Wal-Mart must stop saddling taxpayers with employees' health-care bills, and take the initiative to provide better health coverage on their own," Greenwald said in a statement.
A 2003 Harvard Business School case study found that Wal-Mart paid an average $3,500 a year for employee health care, while the average for the wholesale/retail sector was $4,800, and $5,600 per worker for all U.S. employers.
The Harvard report offered the example of a worker earning $16,800 after three years with Wal-Mart who did not have health insurance. "She felt that she could not afford to enroll in Wal-Mart's medical plan because that would have subtracted as much as $85 from her biweekly paycheck of $550, so she did without and relied on Medicaid for her son," it said.
Studies conducted recently in 13 states show a high ratio of Wal-Mart employees on Medicaid.
In Tennessee, for instance, almost 25 percent of Wal-Mart's 37,000 employees are covered under the state's Medicaid program, according to a January article in the Chattanooga Times Free Press.
Business groups in Pennsylvania and elsewhere oppose the health-care bills, saying they are the first step toward forcing employers to cover such benefits. The proposals include small businesses, which say they can't afford it.
"Instead of looking at how many employees are on Medical Assistance, we should look at reasons why the companies can't afford health insurance," said Kevin Shivers, Pennsylvania state director of the National Federation of Independent Business.
Wal-Mart has faced a slew of lawsuits in recent years over allegations of sex discrimination, illegal hiring of
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