Dive Brief:
- Starbucks is now among the few high-profile U.S. employers to offer its employees health plan choices through a private health insurance exchange, The Wall Street Journal reported.
- Starting in October, eligible Starbucks employees (those working at least 20 hours per week) will be able to select from as many as six carriers and five levels of coverage.
- The company was not aiming for cost savings but to offer employees options because “people intuitively like choice,” Starbucks VP of global benefits Ron Crawford told the Journal.
Dive Insight:
Starbucks stands out for its move because relatively few large companies have switched to private exchanges; others include Walgreens, Sears Holdings Corp. and Darden Restaurants Inc., the Journal noted. Just 8 million people enrolled in private health exchanges for 2016, falling far short of earlier projections by consulting firm Accenture that 22 million workers would enroll in private exchanges by 2017.
That analysis indicated uptake has primarily been driven by midsize employers of 100 to 2,500 employees, while larger employers typically "continue to sit on the sidelines." Starbucks has 157,000 U.S. employees, though it didn't report how many of those work 20 hours per week or more.
Starbucks' move could light some fire under the private exchange trend, suggested Forbes health policy writer Bruce Japsen, noting multiple companies are pushing the appoach including Aon and Mercer. He added that insurers including Aetna, Cigna and some Blue Cross and Blue Shield plans are also working on private exchanges for retirees--with the aim being to stem rising healthcare costs.
Whether private exchanges do in fact contain costs will be key to their uptake; according to Accenture, to succeed they will need to demonstrate stabilization or reduction of healthcare costs.