In a cost cutting move, International Business Machines Corp had advised its retirees that it would be moving their pension fund to a health exchange which offers cheaper plan options. The move would affect about 110,000 Medicare-eligible retirees.
According to a statement made over the telephone by IBM spokesman Doug Shelton, "The company has chosen the Extend Health exchange by Towers Watson, the country's largest private Medicare exchange to provide more options for prescription drug, dental and vision care." This was reconfirmed by email to Bloomberg by the Armonk, NY based technology giant.
The statement further said, "The transition provides more choice and flexibility at equal or better costs for our retirees. While some retirees may be skeptical today, studies show that the majority of people who are presented the concept of an exchange are skeptical at first, but once they understand the options available to them through these exchanges, they have a more positive outlook."
IBM projects that under its current plans, the cost for the retirees would increase by three times its current value by 2020. This would have a great effecct on the premiums for the retirees as well as its out of pocket expenses. The new plan would put retirees in a larger pool of beneficiaries, which spreads the risk aspect as well as lower the overall cost of the plan coverage.
Join the Conversation