The company joins such retailers as Walgreen Co., Darden Restaurants Inc. and Sears Holdings Corp. in moving workers over from a more standard, one insurer policy. Employees must work at least 20 hours a week to qualify for the new program.
Ron Crawford, the vice president of global benefits at Starbucks, hopes that offering more healthcare options will help the company to attract and retain talent. "People intuitively like choice," he told the Journal. As retailers across the country face minimum wage hikes and a drying talent pool, the private exchange also has the potential to reduce overhead costs.
Typically, in a private exchange, a business gives its workers a set amount of money for insurance, and if the employees choose a more expensive plan, they'd pay the rest on their own. Still, as the cost of insurance continues to rise, the onus is on businesses to up their contributions -- or workers will find themselves paying even more.
The news comes just one week after Starbucks announced that it would raise wages for all U.S. store employees by at least 5 percent, in an effort to become a more attractive employer. It also said it would double the annual stock award for employees who've worked for the company for at least two years, consecutively.
Today, just about eight million people have signed on for private exchange health insurance options -- a lower than expected number, according to Accenture, a consulting firm. This may be due to the delay in the implementation of the ACA's "Cadillac tax," which is a tax on high-cost health plans, now set to take effect in 2020.