Massachusetts Spends Millions on Healthcare for Chain Store Employees

Date: 18 Feb 2005 | posted in: Retail | 0 Facebooktwitterredditmail

Massachusetts spent more than $52 million last year providing healthcare coverage to employees of some of the state’s largest companies, including numerous chain retailers like Wal-Mart, Dunkin Donuts, Stop & Shop, CVS, Home Depot, and Target.

Under a new law, the Massachusetts Division of Health Care Finance and Policy is required to annually disclose companies with at least 50 employees relying on MassHealth, the state’s Medicaid program, or the Uncompensated Care Pool, which covers emergency room visits for the uninsured.

Officials recently released the first report, which lists 138 companies that have a total of 27,000 employees, plus 27,000 dependents, relying on state-funded healthcare.

The top four companies—Dunkin Donuts, Stop & Shop, Wal-Mart, and McDonald’s—each have more than one thousand employees who are beneficiaries of the state system. Retail and restaurant chains dominated the list, accounting for two-thirds of the total cost.

Most of the companies listed offer healthcare benefits, but many of their employees either do not qualify or cannot afford the premiums.

Wal-Mart, for example, will pay only 52 of an employee’s healthcare premiums. This means a full-time employee would have to spend more than $2,500 a year to obtain coverage for her and her spouse, according to an AFL-CIO report. For the average employee, this would amount to one-fifth of her pre-tax wages. Part-time workers are not eligible to purchase coverage until they’ve been on the job for at least two years.

Of the companies that made the list, the report found that they paid an average of 73 percent of their employees’ healthcare premiums (for those who qualified for benefits and enrolled in the plan). Most of the retailers contributed less than the average. Home Depot covered just 50 percent, while Target paid 68 percent.

Massachusetts is now the ninth state to document heavy reliance on public assistance programs among employees of big-box stores. Good Jobs First has compiled an overview of the information that has emerged so far. Allowing these chains to shift costs onto taxpayers not only hides the true cost of mega-retailers, but places more responsible businesses at a competitive disadvantage.

Massachusetts is the only state to have adopted a law requiring state agencies to disclose information on how many employees of large firms rely on Medicaid and other healthcare programs. In the other eight states, the information came to light as a result of a special request by a lawmaker or a reporter. Legislators in several states—including Alabama, California, Florida, Hawaii, Maryland, Minnesota, Missouri, Tennessee, Vermont, Virginia and Washington—are now sponsoring legislation similar to the law in Massachusetts.

  • The report includes two sections: an overview [PDF] and a data table [PDF].
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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.