(WALL STREET JOURNAL) -- 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.