Starbucks Health Plans Getting “more Affordable, Less Comprehensive”

Jul 12, 2016

  1. Brian Anderson

    Brian Anderson Executive Editor

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    Interesting week at Starbucks – the company announced Monday it is giving its U.S. workers a 5%-15% raise; unveiled a “small price increase on select beverages” today; and also said it will offer employees more affordable health insurance that will cut costs by being less comprehensive.

    Per the LA Times today:

    What it represents is the ongoing trend of tiered healthcare in this country – strong coverage for those who can afford it and high-deductible, primarily catastrophic coverage for most others.

    “This is great for Starbucks’ healthier workers and for shareholders,” said Peter Hilsenrath, a healthcare economist at University of the Pacific. “But sicker workers likely will have to pay more.”

    The problem, he said, is that without healthier employees helping to subsidize the company’s more comprehensive health plans, rates will go up for those desiring (or requiring) more coverage.

    “You could say Starbucks is exacerbating a problem that we’re also seeing on the insurance exchanges” under the Affordable Care Act, Hilsenrath said. “Costs keep rising for people who need more coverage because the healthier people choose cheaper, high-deductible plans.”

    In a letter to workers, Starbucks Chief Executive Howard Schultz said the company is “evolving” its benefits program so that employees (or “partners” in Starbucks-speak) “may shop, compare and choose health coverage with the similar convenience and personalization people experience when they shop, compare and choose airlines and airfare.”

    “The new healthcare options allow partners to only pay for the coverage they want and will actually use,” he said.

    Starbucks estimates that the lower-cost, less-comprehensive insurance plans will save individual workers up to $800 a year, or $2,600 for those with family coverage.

    Now on Starbucks' menu: Less health coverage - LA Times
  2. yorkriver1

    yorkriver1 Guru

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    It doesn't sound like they are offering those minimal coverage "skinny" plans, just to avoid the penalty. We keep receiving news that companies are offering lower/higher coverage plans to employees. They didn't mention if there are HRA or HSA employer contribution options.

    Fixing the family glitch would help those families with ill family members, or simply those with lower income and the possibility of opting out for tax credits based on the affordability of family coverage not just employee only.

    The plans are often designed to avoid just such a situation, so punishing employers isn't the answer in that situation either.