Walgreen Co. plans to transition more than 160,000 employees to company-sponsored health insurance offered through a private exchange.

Walgreens, health insurance, private exchange, Live Well Benefits Store, Aon Hewitt Corporate Health Exchange, health coverage, Kathleen Wilson-Thompson, Affordable Care Act, ACA, Kermit Crawford, pharmacy benefit, Health Insurance Marketplace, health care benefits

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Walgreens shifts employees to health insurance exchange

September 18th, 2013

DEERFIELD, Ill. – Walgreen Co. plans to transition more than 160,000 employees to company-sponsored health insurance offered through a private exchange.

Walgreens said Wednesday that employees will get health coverage in 2014 via its proprietary Live Well Benefits Store, a marketplace outsourced through Aon Hewitt Corporate Health Exchange. The drug chain noted that the program provides more health benefits options and may enable most employees to lower their out-of-pocket medical costs next year.

The new program also allows Walgreens to continue offering health insurance and wellness benefits to employees as the plan administrator while providing tools and resources to help workers personalize coverage for themselves and their dependents, the company added. Plan members, too, will continue receiving access to Walgreens Healthcare Clinics for a $5 co-payment.

"Under this new program, employees will have expanded choices to personalize their health care coverage in a competitive environment, giving our diverse workforce the flexibility they need to meet their health care needs," Kathleen Wilson-Thompson, senior vice president and chief human resources officer at Walgreens, said in a statement. "We will continue to invest in the health of our employees and their dependents while using a marketplace solution that offers a wide variety of plan options that meet the affordability standard of the Patient Protection and Affordable Care Act."

Walgreens said the new program also continues its value-based pharmacy benefit for employees, which excludes prescriptions from plan deductibles.

"Our experience has been that this approach to pharmacy benefit design is the best way to improve medication adherence and lower overall health care costs," stated Kermit Crawford, president of pharmacy, health and wellness at Walgreens.

Walgreens is among a growing list of employees re-evaluating health benefits amid the changing health care landscape brought by the ACA. Open enrollment for the health reform law's new Health Insurance Marketplace — through which many uninsured Americans will be able to buy health plans via state exchanges — is set to launch Oct. 1 and run to March 31. An estimated 7 million people will buy private plans via the exchanges in 2014, according to the Congressional Budget Office.

Walgreens said it expects that many of its retirees who are under age 65 and eligible for company health care benefits will see reductions in their health care premiums plus more plan options. Medicare-eligible retirees will see no changes in 2014.

The new program also provides an opportunity for Walgreen retirees who weren’t previously eligible for health care benefits to participate in affordable plan options through the Live Well Benefits Store, according to the company. Working with Aon Hewitt, the Walgreens marketplace will offer an array of benefit options and carriers for medical, dental, vision, pharmacy and other benefits coverage in 2014.

Walgreens reported that the contribution toward the cost of health benefits will be at the same level as it was the prior year, with employees selecting a health plan personalized to individual and family needs. Plan options include three high-deductible health plans, a PPO and an HMO-style plan. The company said that with up to five carriers in each of the nation's 21 geographic regions, the range of pricing for premiums can be as low as $5 a month or less — particularly attractive to the 36% of employees who are single and under age 30.

"With continued investment in wellness programs that are an effective means of improving personal health, we are assisting our team members and their families to control the cost of insurance premiums in future years," Wilson-Thompson added. "Our Walgreens 'Well Informed' wellness program, launched in 2010, paid team members approximately $35 million in the last year in incentives and rewards for participation in health risk questionnaires, biometric screenings, healthy activities and tobacco-free counseling services, among other programs."

According to Helen Darling, president of the National Business Group on Health, Walgreens is offering "competitive, cost-effective, flexible benefit choices" through the new program.

"Marketplaces similar to Aon Hewitt, while new for active employees in the employer space, offer opportunities to drive more consumerism and consumer engagement," Darling stated. "Keeping prescription drugs from the plan deductible is innovative and could help control costs and buy more health, not just buy more health care."