IBM retirees will soon be getting health insurance coverage in a new way. The company, which is the third-largest U.S. employer, is moving approximately 110,000 retirees off of its company-sponsored health plan and onto a private insurance exchange.
The exchange chosen by IBM is called Extend Health. IBM says this move will offer retirees more choices and better values than what they’re currently provided with, and says it will cost the retirees the same amount or less than what they’re paying now.
The shift, according to IBM, is because current plans’ rates for Medicare-eligible retirees, like the ones being shifted, are expected to triple by 2020. “IBM didn’t make this change to save money — it does not reduce our costs,” a spokesperson says.
The change will reportedly begin starting Jan. 1, 2014.