IBM moving some retirees off its health plan

September 8, 2013 by David Koenig

IBM plans to move many retired workers off its health plan and give them money to buy coverage on a health-insurance exchange. The move is part of a corporate trend away from providing traditional retiree health benefits as costs rise.

The company says it acted after projections showed that costs under its current plan for Medicare-eligible retirees will triple by 2020 and that the increases would be paid by retirees through premiums and out-of-pocket costs.

An IBM spokesman says the change will affect about 110,000 retirees who are eligible for Medicare.

Under the change, IBM will make annual contributions to health-retirement accounts. Retirees would use the money to buy Medicare Advantage or supplemental Medigap policies through a private Medicare exchange.

The change affects medical, prescription drug, dental and vision coverage.

Explore further: Proposed 'Medicare Essential' plan estimated to save $180 billion over 10 years

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