Walgreens' 160,000 Employees Latest to Endure Health Law’s Broken Promises
WSJ: The health law’s “impact on the industry has created a climate of change.”
CNBC: “If you like your plan, you cannot keep it.”
The latest to feel the pain of a president’s broken promise are Walgreen Co. employees who are losing their current health plan. The Wall Street Journal reports that, “the drugstore giant is expected to disclose a plan to provide payments to eligible employees for the subsidized purchase of insurance starting in 2014. The plan will affect roughly 160,000 employees, and will require them to shop for coverage on a private health-insurance marketplace… As the health law was taking shape, President Barack Obama said people with employer-sponsored health plans would be able to keep them. While the health law metes out relatively few requirements for big employers, its impact on the industry has created a climate of change.” Walgreen Co. joins companies like Sears, Darden Restaurants, Time Warner, and IBM, all of whom have announced similar changes or plans. CNBC’s Joe Kernen sums it up: “If you like your plan, you cannot keep it.”
September 18, 2013
Walgreen to Shift Health Plan for 160,000 Workers
Rising health-care costs and a climate of change brought about by the new federal health law are prompting American corporations to revisit the pact they've long had with employees over medical benefits.
Walgreen Co. is set to become one of the largest employers yet to make sweeping changes to company-backed health programs. On Wednesday, the drugstore giant is expected to disclose a plan to provide payments to eligible employees for the subsidized purchase of insurance starting in 2014. The plan will affect roughly 160,000 employees, and will require them to shop for coverage on a private health-insurance marketplace. Aside from rising health-care costs, the company cited compliance-related expenses associated with the new law as a reason for the switch.
Walgreen is the latest in a growing list of companies making changes to their benefits. International Business Machines Corp. and Time Warner Inc. both said in recent weeks they will move thousands of retirees from their own company-administered plans to private exchanges. Sears Holdings Corp. and Darden Restaurants Inc. said last year they would send employees to a private exchange.
Since the 1940s, health benefits have been a key part of many employees' compensation. A long trend of rising health spending and a wave of changes to the health-care system are prompting many employers to rethink their roles in financing care for employees and their dependents.
Like the shift from pension plans to 401(k) plans beginning in the 1980s, the moves mark a transition in which employers are handing their workers more control over their benefits, some experts say. But as companies set their contributions at fixed amounts to limit benefits spending, workers could wind up shouldering a greater share of the burden if health costs increase. …
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