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120,000 Walgreens Employees Get on Board with Private Health Care
Walgreens Co. is shifting approximately 120,000 of its employees to private health insurance exchange. The Walgreens employees will be moved from direct carriers of health insurance along with “17 other large employers…as part of a growing movement to offer employees fixed dollar amounts to purchase their own plans on such exchanges.” This plan will definitely be more cost effective to the company, whose bottom line is surely affected by the rise in health care and related health costs for its employees.
Employees will choose what level of coverage they want and pay more or less depending on their choice. With the new arrangement, they actually will get more choices regarding who their health care providers are, as well as what their deductibles are etc.
Paul Fronstin, senior research associate with the Employee Benefit Research Institute asks, “what happens to employer contributions over time? Will they put in as much as they put in the past? These are unanswered questions but potential negatives.” At this time Walgreens’ cost-savings and benefit in this new deal are not clear.
According to Accenture Research, in a few years time, almost 20 percent of employees nationwide can attain their health insurance through a private exchange.
By 2015, more than 30 percent of large employers will also move in this direction. Walgreens is the largest drug retailing chain in the United States. They operate 8300 stores in the 50 states, including Puerto Rico and Guam. Their 2012 revenue was recorded at 71 billion dollars.