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More Employers Offering Private Health Insurance Plans

SPRINGFIELD, Mo. -- Open enrollment begins October 1 to start compliance with the Affordable Care Act. Some employers have created their own option, including Walgreens.
SPRINGFIELD, Mo. -- Open enrollment begins October 1 to start compliance with the Affordable Care Act, and many employers are scrambling to understand the law.

However, some employers have created their own option, including Walgreens. It announced Wednesday that it will move 160,000 thousand workers to private health care plans. It's one of the largest employers to make that switch.

The move would be a switch to a fixed amount of money designated for each employee for health care.

The change -- like those in recent months at Sears, Darden Restaurants, IBM, Time Warner -- is to protect the company against rising costs in the future. The health care plan transition also relieves the company of some of the compliance issues that health care comes with on the corporate side.

Missouri State University's Bureau of Economic Research says we may see more and more of this as companies face compliance with this 2-year-old law.

"You've got employers looking at this situation. They are saying healthcare is getting more and more complicated, it's going to be getting more and more expensive possibly, other people say it is going up be getting cheaper -- a lot of confusion," says Dr. David Mitchell. "I think it's just easier for the employers to say, 'You know what, here is some money. Go buy your own plan.'"

Click here to learn about the new exchanges in Missouri and Arkansas, via OzarksFirst.com

So why are companies doing this? Is the Affordable Care Act -- commonly known as Obamacare -- to blame, as critics claim?

"It's hard to know whether the company is doing this because of health care reform or whether it's a nice excuse," says CBS News business analyst Jill Schlesinger. "It's great coverage. It shifts the burden to employees in the future. And we don't know that right now."

Some people opposed to the health care reform argue that it's better and more efficient to let people decide how they're going to spend their health care money. But Schlesinger draws comparisons to the origins of the 401(k) plan: "That's what companies told us back in the '80s -- they said its better to control your own retirement," she said. "In the end, what we know is a fixed pension that was paid for and funded by a company where the company took on the risk was a far better model for employees than funding a 401(k) ourselves and assuming investment risk.

Schlesinger added, "I think that there's 30 years of data that prove pensions would have been a much better plan for employees but a 401(k) was much better for employers."
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