Health care costs up? No problem! Wal Mart suggests tapping 401(k)s

Wal-Mart stores have done it again.

Just when you think they couldn't possibly add to their reputation as a lousy employer, we learn that the nation's largest retailer has raised employee payments for health insurance by 30 percent this year from 2001, to $100 bi-weekly for family coverage.

But don't worry - Wal Mart employees will be taken care of. Just ask Wal Mart. According to the Wall Street Journal, the retailer is offering their employees the "opportunity" to dip into their 401(k) retirement accounts to help pay for the increase. Wal Mart contributes the equivalent of 2 percent of workers' pay to their 401k plans.

"A recent company announcement hails the new policy, but doesn't mention that using such assets carries tax liabilities," said a front-page Journalarticle on Feb. 5. "Workers are grumbling, but some say they have no choice but to rob their nest eggs."

A company spokesman said other literature points out the tax liability. "We want to give our associates as much flexibility as we can," he told the Journal.

The company is hardly cash-strapped: WalMart earned $6.3 billion in income in 2000, and income rose another 4 percent through the first three quarters of 2001, according to Forbes and USA Today. The average Wal Mart employee earns $7.50 per hour or $12,480 per year, based on an average 32-hour work week, according to the United Food and Commercial Workers union.