CVS Health will be increasing its investment in employee wages and benefits by $425 million annually through three major programs, citing "continued growth opportunities" for the company and its employees as the primary motivation. The changes are set to take place this year.
The first program involves increasing the starting wage rate for hourly employees to $11 an hour, effective in April. As part of this change, the company also plans to adjust pay ranges and rates for many of its retail pharmacy technicians, front store associates and other hourly retail employees later in the year. This, the company said, is to ensure a "competitive compensation structure."
The second program ensures that CVS Health will not increase employee premiums for the 2018-2019 plan year. While medical and prescription costs have increased 5 percent year-over-year, CVS will absorb the increase for the 100,000 employees who have chosen to enroll in the company-sponsored health plan.
The company is also creating a new paid parental leave program. Effective April 1, full-time employees with a new child can take up to four weeks away from work at 100 percent of their pay.
CVS Health credited tax savings created by the recently-passed U.S. Tax Cuts and Jobs Act with enabling the investment.
As part of the company's fourth quarter 2017 earnings announcement this morning, CVS Health indicated that it anticipated spending the remaining tax benefit on investments in data analytics, care management solutions and store service offering pilots to improve health outcomes and lower costs for patients, as well as on debt reduction related to its planned acquisition of Aetna.
At the earnings announcement, it was revealed that fourth quarter year-over-year net revenues increased 5.3 percent to $48.4 billion, while revenues for the full year increased 4.1 percent to $184.8 billion.