For Walgreen Co., the decision to move to a private health care exchange — one of the first and largest employers to do so — was not about cost, but rather the personalization of health benefits and health needs.

Employees didn’t care about the move to a private exchange, they cared about what the company would deliver, Thomas Sondergeld, vice president of global benefits and marketing at the retailer, said Thursday at the Private Healthcare Exchanges Conference in Chicago.

In talks around the county about the move, everyone told him it was a huge decision, he said. “It really isn’t. It’s just another way to deliver benefits,” he said at the conference, sponsored by Employee Benefit Adviser and Employee Benefit News.

Also see: "Why private health care exchanges work for employers."

For the retailer that has 8 million customers a day and a store within three miles of 63% of the U.S. population, Sondergeld said the move to Aon’s private exchange happened for three primary reasons:

1) Options: More benefit options than he could ever design as a benefit provider across the country.

2) Affordable choices: Some team members bought a bronze plan for no cost and have basic coverage. “For some people who are 24 and not rock climbing, that’s a good plan,” he said.

3) Wellness and good health: The private exchange allowed Walgreens to step back and deliver both.

Americans spend more time buying TVs than they do buying benefits every year. A private exchange helps increase the time spent on benefits decision-making, due to the valuable consumer decision-support tools, Sondergeld said, adding one employee told him he spent 45 minutes enrolling. “I said, ‘Good, you should have spent an hour,’” he said. “I spent a month debating buying a TV at Best Buy, but we [don’t] do that with benefits. We make [employees] do it in less than 30 days and expect them to do it while working. That’s not a good solution.”

Although Walgreens’ move to a private exchange did lower the company’s health care costs, the tool usage by the retailer’s team members was more important. “Our tool usage was huge; that is what an exchange is about,” Sondergeld said. “Providing tools to drive our [employees] to be real consumers.”

Also see: "Walgreens partners with WebMD on wellness."

Walgreens employees were pleased overall with the exchange. According to an internal survey, 91% liked being able to choose their own carrier and 81% were satisfied with the benefits enrollment experience. “That is huge,” Sondergeld said, “to have 81% satisfaction with enrollment, especially with a population that doesn’t use the Internet much.”

Moving forward, Sondergeld says Walgreens is committed to the private exchange model and believes in the ability for their employees to drive value on their own. “We no longer have to sit in an office and determine clinical appeals,” he said. “We no longer have to spend an inordinate amount of time determining if someone made the right choice on paper.”

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