Wal-Mart Stores Inc. told workers this week that it will begin offering health insurance benefits to the domestic partners of U.S. employees next year.
The extension of health benefits marks a major change for the country's largest private employer of 1.3 million U.S. workers, which has been targeted by gay-rights advocacy groups for failing to do so.
Previously, Wal-Mart had offered benefits to the domestic partners of employees in states that required the retailer to do so by law.
Rather than go state by state, the Bentonville, Ark., retailer decided to adopt a companywide approach to ensure consistent treatment of its employees, spokesman Randy Hargrove said.
The move comes on the heels of the U.S. Supreme Court decision in June to strike down the Defense of Marriage Act, which had denied federal benefits to gay couples married under state law. Earlier this month, the Pentagon unveiled plans to extend the full range of benefits given to opposite-sex spouses to married same-sex couples starting in September and said it would allow military personnel to take "non-chargeable leave" to travel to states where same-sex marriage is allowed.
To qualify for Wal-Mart's extended benefits, employees and their domestic partners, regardless of their sexual orientation, must live together for at least a year and engage in an ongoing, exclusive and committed relationship. The company says it won't ask employees for verification but will act on an honor system.
Nearly two-thirds of the Fortune 500 firms—including General Electric Co. and General Motors Co. —offered such benefits in 2012, up from just 28 in 1996, according to a recent analysis by the Human Rights Campaign, a gay-rights advocacy group that had chided Wal-Mart for not providing lesbian, gay, bisexual and transgender employees with equal benefits.
For the first time this coming year, Wal-Mart will also extend vision coverage to its employees, which is set to cost an average $2 per bi-weekly pay period. Previously, Wal-Mart's workers were able to use a discount card at the store chain's vision centers, but eyeglasses and exams weren't covered by health plans.
More than half of Wal-Mart's workers elect to use the health-care plan offered by the retailer, which has faced criticism in recent years for the number of workers that can't afford or qualify for coverage due to rapidly-increasing premiums and the retailer's decision to spike benefits from employees who work fewer than 30 hours in recent years. At one time, it offered health-care coverage to all part-time employees.
Wal-Mart said workers will see their smallest increase in benefits costs "in years," which will go up in 2014 by 3% to 10% on average, depending on the plan they choose, a spokesman said.
In 2013, workers chose from at least three plan designs, with in-network annual deductibles of $1,750, $2,750 or $3,000 for a single employee. These come with company contributions to health accounts—which are used to defray health costs—of $500, $250 and a match of up to $300, respectively.
Write to Shelly Banjo at shelly.banjo@wsj.com
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