Josh-D. S. Davis

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IBM to drop health coverage for retirees
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IBM plans to move about 110,000 retirees off its company-sponsored health plan. The move affects all IBM retirees once they become eligible for Medicare, beginning December 31, 2013.

IBM Chief Health Director Kyu Rhee told retirees 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.

Instead of subsidizing retiree health premiums directly, IBM will give retirees an annual contribution via a health retirement account that they can use to buy Medicare Advantage plans and supplemental Medicare policies on the exchange, as well as pay for other medical expenses.

Retirees who don't enroll in a plan through Extend Health won't receive the subsidy.


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