The high cost of health insurance is forcing employers to consider alternatives that could change how they provide coverage to their workers.

Breaking with what has been the traditional offering, Sears Holding Corp. and Darden Restaurants Inc. are planning to offer employees a lump sum for them to purchase their own insurance. The historic practice has been for employers to offer the same insurance plan with defined benefits to be paid through employer and employee contributions.

Neither Sears nor Darden, which operates Red Lobster and Olive Garden restaurants, would say how much health funding they would give their employees who would be able to shop around for their health insurance. Workers will also be able to contribute what they want out of their paychecks instead of a specific contribution set by the company to cover premiums. Employees could spend more to purchase more expansive coverage with lower deductibles or more prescription drug coverage or buy a less costly plan that requires higher deductibles.

Employers say a key component of the plan is employee choice that gives them greater control over their health care decisions while controlling their costs. The plan “puts the choice in the employee’s hands to buy up or buy down,” said Danielle Kirgan, a senior vice president at Darden. It expects to make the transition this fall with the new coverage effective Jan. 1.

There are concerns that the company’s cash payment will not keep up with inflation. However, the expectation is that having thousands of new workers seeking coverage through exchanges backed by employers will lead insurers to reduce costs to remain competitive. Currently, employers and workers pay about $14,475 a year in premiums with employees picking up about 28 percent of that. Several insurance companies plan to establish employer-focused exchanges while other employers are waiting to see how the transition works

Putting more choice in workers’ hands is not much different from what Medicare recipients do now when they shop around for a supplemental insurance plan. The shift will put a greater responsibility on workers to determine their needs, desired levels of coverage and cost options in a changing marketplace.

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