suntimes
By SANDRA GUY
AND FRANCINE KNOWLES
Business Reporters
Last Modified: Sep 28, 2012 12:02AM
Sears Holdings Corp. and Aon P.L.C. are radically
shifting the way their employees choose their health care coverage — letting
employees decide their level of coverage and how much of their employerfs
contribution to spend.
Employees will go to an online Web portal to make their
selections, starting Jan. 1.
More companies are expected to adopt the model as health care
reform gets under way and as they face higher health care coverage expenses as
long as they run their own medical insurance programs. Companies save money by
letting an outside administrator choose their employeesf health insurers and run
the program. As plan sponsors, employersf premium contributions are still
tax-deductible. Employees get a greater choice of coverage.
gThe more insurance providers compete, the better,h said
Chris Brathwaite, spokesman for Hoffman Estates-based Sears. gI will have an
opportunity to shop for a health care provider who meets my medical and my
pocketbook needs.h
Aon Hewitt, Aonfs Lincolnshire-based benefits consultancy,
will administer a health care gexchange,h or marketplace, where Sears and Aon
employees will choose among five different health care plans. Nine insurers are
participating, including Cigna Corp., UnitedHealthcare and Health Care Service
Corp., which runs many Blue Cross/Blue Shield plans.
Darden Restaurants, the Orlando, Fla.-based owner of Red
Lobster, Olive Garden and LongHorn Steakhouse restaurants, will also participate
in the exchange. The company operates about 50 restaurants in the Chicago area.
Employees will receive a fixed premium contribution as they
do now — as pre-tax dollars out of their checks — and pay more or less than that
amount depending on the level and type of policy they choose.
The credits will most likely differ based on an employeefs
family status, with higher credits given to employees who want to buy family
coverage, as is the case now.
Sears and Darden spokespeople said they will provide the same
subsidy they do now, and will review yearly cost-of-living expenses as part of
the equation.
Initially, the premiums will be based on each employerfs
claims experience.
All of the insurance plans provide for catastrophic
protection and cannot reject people for medical histories or pre-existing
conditions, said Ken Sperling, national health exchange strategy leader for Aon
Hewitt.
The new system will include 90,000 full-time Sears employees
and 45,000 full-time Darden Restaurant employees. Aon didnft provide a number,
but said it expects the health care exchange to enroll more than 100,000
employees in total.
Brandon Cruz, founder and president of Chicago-based
GoHealth, said companies that previously paid 16 percent yearly increases in
healthcare provider costs, on average, can now just keep paying the fixed
subsidy to employees.
gIf the cost of the coverage goes up, the employee can switch
to another providerh thatfs more affordable, he said.
The shift also takes away a largely unspoken dilemma that
company leaders face prior to health care reformfs 2014 requirements — knowing
that laying off an employee or otherwise kicking an employee off coverage will
leave certain employees — those with pre-existing conditions, for example — with
no coverage.
gAfter 2014, people can get health care coverage on their
own,h Cruz said.
GoHealth, which runs a healthcare exchange for individuals
and sells a software platform for companies to set up their own exchanges, is
benefitting from insurance companiesf need to operate more efficiently in the
new health care environment.
GoHealth has hired 130 sales, service and
technology employees in the past three weeks and is searching for a new Loop
site to hold 600 employees. It now employs 325.
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