KHN Morning Briefing

Summaries of health policy coverage from major news organizations

IBM, Time Warner Move Retirees To Private Health Exchanges

IBM and Time Warner are moving retirees out of company-sponsored health plans and giving them money to buy coverage in private health insurance exchanges. The companies will allocate funds that retirees can use to shop for coverage in marketplaces similar to those being set up under the federal health care law. 

The Associated Press: IBM Moving Some Retirees Off Its Health Plan
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 (Koenig, 9/7).

The Wall Street Journal: IBM To Move Retirees Off Health Plan
IBM's shift is an indication that health-insurance marketplaces, similar to the public exchanges proposed under President Barack Obama's health-care overhaul, will play a bigger role as companies move coverage down the path taken by many pensions, paying employees and retirees a fixed sum to manage their own care. 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. (Ante, 9/7).

The Wall Street Journal: Time Warner Joins IBM In Health Shift For Retirees
Insurance exchanges are the health-care experiment du jour. Retirees are the test case. The latest indication: Media-company Time Warner Inc. plans to move its U.S. retirees from company-administered health plans to private exchanges, according to a person familiar with the matter. The company will allocate funds in special accounts that retirees can use to go shop for coverage, the person said (Ante, 9/8).

Reuters: Time Warner To Move U.S. Retirees To Healthcare Exchanges
Time Warner Inc is planning to transfer its U.S. retirees from company-sponsored health plans and move them to private insurance exchanges. According to an August memo obtained by Reuters, the media company will make allocations to a Health Reimbursement Arrangement account for retirees to use towards the purchase of coverage on an exchange. Previously, Time Warner provided an indirect subsidy through a supplementary Medicare program (9/8).

Reuters: IBM To Transfer U.S. Retirees To Healthcare Exchanges Next Year
IBM plans to move U.S. retirees off its company-sponsored health plan and shift them into new private insurance exchanges as a way of lowering costs for retirees. IBM had selected Extend Health, which is owned by Towers Watson & Co, to provide retirees with new health options for medical, prescription drug, dental and vision coverage, the company said in a statement on Friday (9/7).

The Associated Press/Washington Post: Time Warner Joins IBM In Moving Retirees To Private Health Insurance Exchanges To Cut Costs
Media and entertainment company Time Warner Inc. plans to move its retired workers off its health plan and provide money to them to purchase coverage on private exchanges at the beginning of next year (9/8).

Earlier, related KHN coverage: As More Employers Drop Coverage, Retirees Turn To Specialized Insurance Exchanges (Andrews, 8/15/2012).

In a related development, employers are also cutting health care coverage for workers' spouses -

Indianapolis Star: Kroger Health Insurance End For Spouses May Be Model For Future
Cincinnati-based grocer Kroger has become the latest major employer to cut health care coverage for workers’ spouses, negotiating an Indiana contract that could become a model for companies nationwide. The contract applies to only 11,000 Kroger workers in Indiana, but it puts Kroger at the leading edge of a growing movement to restrict or eliminate spousal coverage. ... Few [companies] have eliminated spousal coverage altogether, though. That’s beginning to change. Last year, 4 percent of companies barred coverage of spouses in the same way Kroger now does in Indiana, according to Towers Watson, a human resources consulting firm. Next year, that figure is expected to climb to 12 percent (Horn, 9/8).

The Columbus Dispatch: Employers Limit Health Plans For Spouses
Employers are placing greater limits on how two-income families get health coverage through their jobs. ... This year, 34 percent of public employers in Ohio have some type of stipulation for employees whose spouses have other means of medical coverage, according to survey results reported last month by the State Employment Relations Board. That compares with 26 percent five years ago. Most Ohio public employers who have spousal restrictions require that employee spouses use their own employer insurance as their primary form of coverage, if available, the survey found (Sutherly, 9/8).

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