NEW YORK - Walgreen Co., the biggest U.S. drugstore chain, will move its workers into a private health insurance exchange to buy company-subsidized coverage, the latest sign of how the debate over Obamacare is accelerating a historic shift in corporate health-care coverage.
About 160,000 Walgreen employees now have to choose which coverage plan suits them best at a time of rising complexity in the health-care system. While Walgreen said it will provide funding in 2014 equal to what workers get now, the move curtails uncertainty on future outlays, and there's no guarantee its contribution will rise if premiums do.
Walgreen joins Sears Holdings Corp. and Darden Restaurants Inc. in a private exchange run by Aon that includes 18 companies and 600,000 people, Aon said. While the private effort isn't directly linked to Obamacare, the growing use of private exchange similar to the law's public ones adds new fodder to the debate over the law's influence.
"For a while, large employers have been moving in this direction," said Thomas Buchmueller, a professor at the University of Michigan's Ross School of Business in Ann Arbor, by telephone. "After the legislation was passed, they looked at the exchanges and said, 'This is something we can do.'"
Michael Polzin, a spokesman for Deerfield, Ill.-based Walgreen, denied that his company's move was driven by the Affordable Care Act's 2010 passage and provisions, saying, "It's something we've been looking at very closely in the last couple years."
"It's hard to link the two," Polzin said in a telephone interview. "We want to continue to be very innovative in the health care we're providing employees, just as we're innovative as a health-care provider."
The options offered by the private exchange offer similar levels of coverage to those in the Affordable Care Act's public exchanges, though workers will get their subsidies from their companies instead of the government, said Ken Sperling of Aon.
Other large employers, including IBM Corp. and Time Warner, have this year moved their retirees into private exchanges from company-picked plans. Trader Joe's Co., the closely held grocery store chain, has said it will move part-time workers at its 400 stores onto the Obamacare exchanges, and United Parcel Service Inc. decided to drop health benefits for 15,000 of its workers' spouses who can get insurance through another company.
Companies are "tired of the volatility, the complexity and the cost" tied to traditional health plans, said Sperling, the national health exchange strategy leader at Aon. "Volatility, complexity and cost - those are the things that run through health care right now."
Disappearing are the days of the company owning their workers' welfare, said Linda Barrington, the executive director of Cornell University's Institute for Compensation Studies.
Retirement plans such as "401(k) and the like require more of employees than did the traditional pension, albeit they also offer more 'choice,'" Barrington said in an email. "Choice can be good. But making the right choice requires educating oneself and discernment in the decision - both which are responsibilities that take time, and maybe some talent."
The move to put workers into private exchanges will probably gather steam, said Paul Fronstin, director of health care research at the Employee Benefit Research Institute.
"I expect it too, though I also expect it won't happen overnight," Fronstin said in an email. "Most major trends in benefits have taken decades to take off."