Starbucks customers are used to a lot of choice when it comes to their coffee orders. Now Starbucks workers are about to get a taste of wide-ranging options when it comes to their health insurance — and possibly save some money at the same time.
The java giant revealed Monday that starting this fall it will give eligible employees in the United States the ability to buy their health coverage through a private health exchange, which will increase the number of insurance options available to them.
Eligible workers are those who work 20 hours or more per week. They currently have the option of enrolling in three different levels of coverage offered by a single insurer.
With the private exchange, Starbucks workers — who won't see the value of their health benefits from the company cut — will be able to "choose from as many as six national and regional [insurance] carriers and five coverage levels based on their budgets and their preferred insurance carrier," according to the company. The new private exchange platform is designed and will be operated by Aon.
While some options will have higher monthly employee premiums than the current option, they also could have lower out-of-pocket health charges for workers. Conversely, some options would have lower premiums, while having higher out-of-pocket charges, including deductibles, copayments and coinsurance.
Starbucks said that "any cost savings achieved will go right back to its partners," the term the company uses for its workers.
"Eligible partners in the U.S. could save up to $800 annually by moving to a health insurance plan that better meets their individual needs," the company said.
"The potential savings are even more for partners who select family coverage, with the opportunity to save $2,600 annually."
At the same time, "Starbucks will continue to fund approximately 70 percent of the premium costs and cover 100 percent of preventive care services," the company said.
To help workers navigate both the new private exchange, and "get the most out of their health-care plans," the company said employees will have access to advisors known as "Healthcare Advocates" at any time during the year.
The announcement comes a week after Starbucks said it would raise the base pay of all workers and store managers by 5 percent or more in October, and would also double the annual award of its stock program for hourly workers who have been employed by the chain continuously for at least two years.
Starbucks, which has about 160,000 U.S. employees, did not reveal how many of those are eligible for health benefits. But the company, which has offered health benefits since 1988 to eligible workers, said it invested more than $280 million in health benefits during the prior fiscal year.
The company's current health coverage is offered via Premera Blue Cross. Starbucks workers have been able to select one of three Blue Cross plans: a gold plan, silver and bronze.
The amount of health benefits that are covered by the plan decreases as the "metals" go down in value — with bronze plans as a rule having the lowest premiums but larger out-of-pocket costs imposed on workers when they obtain medical care.
Under the new private exchange platform that will begin Oct. 1, Premera Blue Cross will be joined by three other national carriers as options for workers: Aetna, Cigna and UnitedHealth, according to Starbucks. In some regions of the country, one or two other regional health plans will be offered to workers.
And there will be five different levels of coverage: platinum, gold, silver, bronze plus and bronze, the company said.
"Providing industry-leading benefits for eligible full- and part-time partners is a cornerstone of who we are as a company," said Ron Crawford, Starbucks vice president of global benefits.
"Much like a travel site, our partners will be able to navigate an easy-to-use online platform to choose between more insurance carriers and coverage levels at more competitive prices to help them find the right plan for their own needs," Crawford said.
A Starbucks spokesman said the company was aware of the risk that some workers might face if they opted for a bronze plus, or bronze plans in expectation of having low or no health-care usage, but then ended up needing health services during the course of the year after enrolling in coverage. Because bronze plans typically have high out-of-pocket costs, such a scenario could leave a worker owing significant amounts of money after they obtained health care.
The spokesman said Starbucks had "tweaked" the plan design to avoid that scenario.
"We made sure to put a low ceiling on those out-of-pocket costs," the spokesman said.