Depending on whom you ask, the nation’s largest retailer of natural and organic foods can be held up as a model for health care reform for other employers to emulate or dismissed as a notorious cost-shifter that forces employees to ration their care.
Whole Foods Market, Inc. pays 100% of monthly health care premiums for U.S. employees who work 30 hours a week, which translates into roughly 89% of a 51,100-member workforce. And though they face a $2,500 annual deductible, these employees receive $300 to $1,800 toward a Personal Wellness Account, depending on their years of service, to help ease out-of-pocket costs.
The plan design was cited as one of several reasons that Whole Foods landed on Fortune magazine’s “100 Best Companies to Work For” ranking, becoming one of just 13 companies to be named every year since the list’s inception.
Rick Knox, an employee benefits consultant with Capstone Brokerage Inc. in Las Vegas, Nev., lauds Whole Foods for not only helping employees leverage their benefit dollars but also building a corporate culture around wellness and accepting more personal responsibility for one’s health.
“The intention of this is that employees are going to spend the $1,800 as if it was their own money,” he says. For example, someone paying $130 a month for Lipitor will be more apt to ask for a generic equivalent to help budget for other health-related expenses.
Greg Scandlen, a senior fellow and director of Consumers for Health Care Choices at the Heartland Institute in Hagerstown, Md., believes Whole Foods offers “some interesting lessons” about health care delivery – particularly for those who “conform to the ideological dogma of expanding government at all costs.”
But Sally Hampton, a Los Angeles-based advocate of the single-payer system, cautions that health care coverage at Whole Foods results in an apples-to-oranges comparison to the rest of the nation because of the company’s largely young, healthy and lower-paid workforce.
“They do not provide good health care benefits for their employees,” she explains, describing the coverage as a “self-rationing” type program and noting how the Personal Wellness Account can be quickly depleted even for those who earn double minimum wage. “If one of these employees gets sick, they’re in trouble.”
Whole Foods CEO and Chairman John Mackey triggered a firestorm of controversy and boycott of his company in August after penning a
“While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system,” he wrote in The Wall Street Journal. “Instead, we should be trying to achieve reforms by moving in the opposite direction-toward less government control and more individual empowerment.”
Ironically, Mackey has railed against excessive compensation for his fellow chief executives – a cause embraced by the boycotters of his chain – and gone as far as capping the pay of his top execs to 19 times average full-time pay. Critics, though, point out that any such comparison is unfair and disingenuous because he’s already independently wealthy from years of stock options.
Whole Foods, which is based in Austin, Texas, declined to participate in this article, citing a long-standing policy of not sharing information with trade magazines or business-to-business publications because of its industry’s highly competitive nature.
Hampton, an early organizer of the Whole Foods boycott, accuses Mackey of poisoning the health care reform debate with insurance industry misinformation, and as such, abusing his power as a captain of industry to advance a libertarian political agenda.
Bill Patterson, executive director of CtW Investment Group, recently slammed the CEO, who is no stranger to controversy, for trying to capitalize on his company’s brand reputation by championing personal political views that have “deeply offended a key segment of Whole Foods consumer base.” Calling the CEO a liability, he asked the company’s board of directors to replace him immediately and instead “focus on improving operations in an uncertain economy.”
While acknowledging that cashiers and stockers don’t have much money to spend on their health care, “some insurance is better than no insurance” for this segment of the workforce, argues Regina Herzlinger, a Harvard Business School professor and author of “Consumer-Driven Health Care: Implications for Providers, Payers and Policymakers.”
Guest blogger Bruce Shutan is a former managing editor of Employee Benefit News and a freelance writer based in Los Angeles.
