IBM, Time Warner shift employees to private exchanges
Another reason insurers might increasingly sell plans on private health insurance exchanges: Two more large companies have announced they're shifting some employees to the online marketplaces.
IBM and Time Warner both announced this week they're going to move some retirees to private exchanges where they can shop for individual coverage. Both companies will give retirees an annual contribution through a health retirement account that goes toward Medicare plans sold through private exchanges, reported the Wall Street Journal.
"Companies are moving away from retiree health plans generally as costs become prohibitive in some instances," Ariel Gonzalez, director of federal health and family government affairs for AARP, told the Journal.
Time Warner believes shifting its retirees "will ultimately be beneficial for all retirees by providing more choice of coverage ... for, in many cases, a lower cost," James Cummings, Time Warner's senior vice president of global compensation and benefits, wrote in a memo to employees, Reuters reported.
IBM said its decision, which affects about 110,000 of its retirees, was prompted by projections showing its costs for Medicare-eligible retirees would triple by 2020, according to the Associated Press. IBM's employees will obtain coverage through Extend Health, a private Medicare exchange operated by Towers Watson.
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