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Sunday, June 23, 2019
Walgreens: “By Any Other Name Would [Be Greed]”
Walgreens Will No Longer Provide Health Benefits for Retired Employees:
“Walgreens said in a September letter reviewed by CNBC that it would no longer subsidize medical benefits for its former employees who hadn't turned 64 by March 31, citing ‘rising and unpredictable healthcare costs’…
“Some 550 retirees receive the subsidies from Walgreens before they turn 65 and are eligible for Medicare. Under the age restrictions laid out in the September letter, they won't receive the payments, which vary in amount based on employees' years of service.
“Neither will employees who were eligible for the benefit upon retirement under the old rules, which made it available to employees who had turned 50 by May 2017 and had worked at the company 20 years. (Employees still needed to be at least 55 with at least 25 years of service at the time of retirement to receive the benefit).
“Walgreens tightened the requirements for the subsidies in the past, eliminating eligibility for new hires and younger employees, but until last fall, the company had stopped short of touching the payments of retirees who were already receiving them.
“‘Pre-65, I do think it's unusual to take people who already have a subsidy right now and eliminate that subsidy,’ said Derek Guyton, a partner in the health and benefits business at Mercer, owned by Marsh & McLennan. ‘What's more common is you tell people way ahead of time you're not going to have this subsidy when you get to 55 or what have you. That obviously has happened a lot and continues to happen, but taking it away from people, some employers consider that almost an employment contract.’
“Walgreens has said it is working on a ‘lower-cost, unsubsidized retiree health program starting in 2020,’ according to an October letter it sent to retirees. It has yet to provide details on its plan.
“Walgreens spokesman Phil Caruso said that the company reviewed a host of factors before deciding to change eligibility requirements for the subsidies.
“‘We are continuing to work toward a new retiree healthcare program for 2020, paying particular attention to the transition impact for those with current subsidized coverage,’ he said. ‘We will continue to update our retirees.’
“The drugstore chain employed roughly 354,000 people as of August, according to its annual report…
“Despite its profits [Recent Quarter Earnings Rose 4.6% to $34.53 Billion], the drugstore chain is under pressure from investors to cut costs.
“Pharmacies are getting paid less to fill prescriptions as insurers squeeze them. Prices of the drugs they're dispensing aren't increasing at the same rates they used to as drug makers face pressure from lawmakers. People also aren't buying as much candy and soap at drugstores, instead buying convenience items online on sites like Amazon.
“The company earlier this year ramped up cost-cutting after CEO Stefano Pessina called its second-fiscal quarter the most difficult quarter since Walgreens acquired Boots Alliance in 2015. [Pessina’s Net worth Is $10 Billion. His Net Worth Was $15.3 Billion in 2015. He Earned $14.7 Million in 2017. The Average Hourly Rate for Employees Is $12.33]. Walgreens now expects to save $1.5 billion annually by 2022, executives told Wall Street analysts on a conference call in April.
“In cutting the subsidies for early retirees, Walgreens reduced its benefit plan obligation by $201 million in 2018 from the previous year, the company said in its annual report…” [There Are 13,200 Walgreens Stores in 11 Countries. The Company’s Net Worth Is $47.95 Billion (as of June 21, 2019). The Average Hourly Rate for Pharmacy Technicians Is $12.88; the Average Hourly Rate for Retail Shift Supervisors Is $12.98; the Average Hourly Rate for Customer Service Associates Is $8 - $12].
For the entire article, click here.