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Although Not Typical, Walmart’s Employee Benefit Costs Worth Noting


By Anita Nair Hartman/Tuesday, September 16, 2014
Anita Nair-Hartman imageA recent CNBC article discussed Walmart’s announcement that it will spend far more than anticipated on employee health coverage and have to trim its earnings forecast for the year. The retailer expected more workers to seek coverage under the Affordable Care Act’s (ACA) mandated coverage requirement, but the actual number topped their projections. Although this news has gotten a lot of attention, National Business Group on Health research indicates that most employers aren’t expecting as large of a jump in healthcare costs as Walmart, and Truven Health research supports this. As the CNBC article points out, Walmart’s employee base has some unique characteristics -- including low-wage workers in states where Medicaid expansion didn’t occur, forcing them to chose Walmart (rather than Medicaid) coverage. These aren’t typical employer circumstances.

Nonetheless, after years of low healthcare inflation, employee benefit costs have grown this year, and Wall Street is going to be keeping an eye on the impact to every company’s bottom line. For employers, monitoring benefits spend and strategy is more critical than ever. Equally important will be engaging employees in healthcare decision making, improving health and productivity through wellness programs, and remaining vigilant on fraud and waste.

Anita Nair-Hartman
Vice President Market Planning and Strategy

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