Walgreen moves employees to private healthcare exchange
By Beth Pinsker
NEW YORK (Reuters) - Walgreen Co, the largest U.S. drugstore, is moving 120,000 employees to a private health insurance exchange where they can choose a plan from multiple insurers, a sign of the shifting landscape for corporate healthcare because of rising costs.
The pharmacy chain and 17 other large employers will offer their employee insurance for 2014 through the Aon Hewitt Corporate Health Exchange, part of a national move in which companies are playing a less direct role in providing health insurance coverage themselves.
For example, IBM Corp and Time Warner Inc recently said they are moving retirees to exchanges for those not yet Medicare-eligible and other exchanges for those who are.
The end-cost of these plans sold on these different types of exchanges depends on the plan chosen, but the purchasers will have more options than under traditional arrangements. The Aon Hewitt exchange that Walgreen is using will offer employees insurance plans from multiple companies including UnitedHealth Group Inc and Aetna.
Private exchanges mimic the coverage mandated as part of the Affordable Care Act, but their creation is not part of the law. The public exchanges being set up under the law will enable individuals to buy government-subsidized healthcare based on income; enrollment begins on October 1.
Walgreen's decision will likely prompt its competitors in the retail industry to take a closer look at private exchanges, said Chris Condeluci, an employee benefits attorney at Venable LLP and a former staffer with the U.S. Senate Finance Committee who helped draft the healthcare reform law.
"Large employers have been taking a wait-and-see approach, and they have been watching for those employers who will adopt early," Condeluci said. "They are going to watch who they are and how successful they are."
Walgreen said it will make the same premium contribution for its employees' 2014 plans that it did in 2013. Continued...