Walgreens Replaces Company Health Care with Payouts

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Walgreens is the latest major employer to rewrite its health care program in a drive to limit rising costs by taking advantage of new federal regulations, the Wall Street Journal reports.

The largest drug retail chain in the United States said Wednesday that it will provide payments to roughly 160,000 employees to shop for their own insurance plan, replacing the traditional company-administered plans.

The shift follows similar reforms from other companies, like Trader Joe’s, which announced earlier this month that it will drop coverage for part-time workers and give them $500 dollars to shop for their own plans using the new exchanges forming under the rubric of the Affordable Care Act.

The new exchange system is expected to offer more competitive pricing in the insurance market and gives the employees access to federal tax credits. But it still isn’t clear if workers will face higher costs, particularly if the company payments don’t match rising health care costs down the line.

[Wall Street Journal]