Citing "rising and unpredictable healthcare costs," Walgreens said it would no longer subsidize health insurance for its retired employees who hadn't turned 64 by March 31 of this year, according to CNBC.
About 550 Walgreens retirees had been receiving subsidies from Walgreens to help them pay for their health insurance before age 65, when they are eligible for Medicare. Employees received payments based on their years of service.
Eligible employees needed to be at least 55 years old with at least 25 years of service at the time of retirement to receive the benefit.
Now, under the restrictions laid out in a letter to employees, employees will not be receiving the payments.
According to CNBC, Walgreens changed requirements for the subsidies in the past, eliminating eligibility for new hires and younger employees, but until last fall, the company had not cut payments of retirees who were already receiving them.
Walgreens said it is working on a "lower-cost, unsubsidized retiree health program starting in 2020," according to the report.
The move to cut the payment comes as the retail giant faces increasing headwinds in the industry. In the second quarter of this year, Walgreens missed sales and earnings expectations and vowed to cut more than $1.5 billion in costs by fiscal year 2022.
Read the full report here.