Walgreen Co., the parent company of Walgreen’s, is joining the “Let’s change our health care” party, right after Trader Joe’s announced it’d be giving employees money to purchase their own health insurance on the exchange system. The company announced today that it will send eligible employees shopping for coverage instead of using a company-backed system.
The Wall Street Journal says Walgreens will give around 160,000 employees a fixed amount to purchase coverage on a private health-insurance marketplace starting in 2014. It’s partly due to rising health-care costs as well as the expenses tied to complying with the new health care laws, said the company.
“You’re completely moving away from a paternalistic employer deciding what’s best for employees,” says an economist for the Employee Benefit Research Institute in Washington. “Workers don’t need their employer anymore for health coverage. They just need the employers’ money,” he says.
The Associated Press notes that the workers will be able to pick from an array of 25 plans on the exchange, depending on where they live. It’s the same exchange used by Darden Restaurants and Sears, which is run by benefits consulting giant Aon Hewitt.
Walgreen’s is hailing this as a way to make their employees better consumers, as well, by offering them a number of choices.
“I think the only way to drive down costs in the health care space is to have the consumer buying the health care be knowledgeable and educated and understand what they are buying, “ said Tom Sondergeld, senior director of health and wellbeing for Walgreens.
Options in the “Living Well Benefits Store,” as Walgreens is calling it, include HMO-style coverage with no deductibles and lower out-of-pocket costs than some plans. There’s also the option of plans with premiums as low as $5 per month, which Walgreens says could appeal to the 36% of its employees who are single and under 30.
Walgreen to Shift Health Plan for 160,000 Workers [Wall Street Journal]
Walgreen moves health coverage to option that provides more choices, responsibility for worker [Associated Press]