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1 posts categorized "Insurance news"

September 09, 2013

IBM to drop 110,000 retirees off its health insurance plan

This is certainly an interesting shift that should impact a large number of Rochester retirees.

On Dec. 31, IBM is dropping all of its Medicare-eligible retirees from its health insurance coverage.

Maybe I should check with the Rochester IBM retirees group for some comments about this. Wonder if anyone would say anything on the record.

Here's some from an article by Spencer E. Ante of the Wall Street Journal:

International Business Machines Corp. plans to move about 110,000 retirees off its company-sponsored health plan and instead give them a payment to buy coverage on a health-insurance exchange, in a sign that even big, well-capitalized employers aren't likely to keep providing the once-common benefits as medical costs continue to rise.

The move, which will affect all IBM retirees once they become eligible for Medicare, will relieve the technology company of the responsibility of managing retirement health-care benefits. IBM said the growing cost of care makes its current plan unsustainable without big premium increases.

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In notices signed by Chief Health Director Kyu Rhee, IBM has told retirees in recent weeks that to keep receiving coverage, they will need to pick a plan offered through Extend Health, a large private Medicare exchange run by New York-based Towers Watson & Co.

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"Cost increases under our current retirement group health care plan are no longer sustainable for you," IBM said in the notices. "Health care costs under IBM's current plan options for Medicare eligible retirees will nearly triple by 2020, significantly impacting your premium and out of pocket costs," the notice said.