Benefits and Compensation

Wal-Mart Steers Workers to Selected Providers for Big-ticket Medical Procedures

Wal-Mart, the nation’s largest private employer, is getting in on the concept of “Centers of excellence,” a method of steering referrals to providers who perform more efficiently in a bid to bend the health cost curve. With the generous coverage, the company creates good press and may counter its reputation as being skimpy on workers’ benefits. The company has defended itself in a long line of court cases, a few of which are outlined below.

Special Benefit for Heart, Spine and Transplants

Wal-Mart health plan participants are now covered for their heart, spine and transplants, and the company also will pay travel costs to send them to one of six health centers, selected on the basis of quality and care coordination, the company announced earlier this month.

Spine procedures such as cervical and lumbar spinal fusion, total disk arthroplasty, spine surgery revisions and others will be performed by Mercy Hospital Springfield (Mo.), Scott & White Memorial Hospital in Temple, Texas, and Virginia Mason Medical Center in Seattle. Transplants will be provided by the Mayo Clinic in Rochester, Minn.

The Cleveland Clinic, Geisinger Medical Center in Danville, Pa., Scott & White and Virginia Mason will get patients for cardiac surgery including open-heart surgery, heart valve replacement/repair, closures of heart defects, and thoracic and aortic aneurysm repair.

Wal-Mart will pay travel and expenses for patients to get the procedures at one of the six facilities; the treatments will be covered with no copay or deductible to the worker, the company said.

Wal-Mart operates approximately 3,400 stores and employs more than one million people.

Wal-Mart’s Litigious History

Not surprisingly for a large retail employer, it has been in litigation over wage and hour compliance and gender discrimination. It has also strongly defended its position as self-funded health plan sponsor. Here are some examples.

Last summer, Wal-Mart had to pay for overtime violations at stores nationwide, according to the U.S. Department of Labor. According to the agency, various managers and coordinators were not paid proper overtime wages, because Wal-Mart allegedly misclassified them as exempt from the Fair Labor Standards Act’s overtime provisions.

In Walmart v. Dukes, 131 S. Ct. 2541 (2011), the U.S. Supreme Court blocked a massive gender discrimination lawsuit against Wal-Mart, but only after Wal-Mart had lost rounds in district and appeal courts.

In Huber v. Wal-Mart, 486 F.3d 480 (8th Cir., 2007), cert. denied, 128 S. Ct. 1116 (2008), the company defended its decision to not give her the position she requested after being injured, but instead to transfer her to a position where she was paid almost half of what she was making before. The appeals court decided that even though the plaintiff could no longer perform the essential functions her former job, the Americans with Disabilities Act did not require Wal-Mart to reassign her to the vacant position she wanted and was qualified for, because Wal-Mart successfully argued that another worker was more qualified.

In Administrative Committee of the Wal-Mart Stores, Inc. v. Shank, 2007 WL 2457664 (8th Cir., 2007), it successfully asserted its right to subrogated money even though the proceeds were in a special needs fund held by the defendant, who was an invalid. (The company later dropped its claim after negative publicity).

In 2006, Maryland enacted the Fair Share Health Care Fund to force Wal-Mart to spend at least 8 percent of payroll on workers’ health insurance. That law was promulgated by groups that alleged the retailer was not paying “its fair share” on employee health. In RILA v. Fielder, 2007 WL 102157 (4th Cir., 2007), the 4th U.S. Circuit Court of Appeals found the law was preempted by ERISA.

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