Time Warner shifting retiree health coverage
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.
Company spokesman Keith Cocozza confirmed the plan Sunday.
The move, which was earlier reported by Reuters, is similar to a change confirmed by IBM Corp. on Saturday.
Both companies plan to allocate money to special accounts which retirees can use in purchasing coverage.
Such moves are meant to lower costs and are part of a corporate trend away from providing traditional retiree health benefits as costs rise.
IBM is moving more than 110,000 retirees from a group plan to Extend Health, a private exchange owned by Towers Watson & Co., to allow retirees to buy medical, prescription drug, and vision coverage there.
Doug Shelton, a spokesman for New York-based IBM Corp, said the company’s move to shift more than 110,000 retirees to a private Medicare exchange “is not a cost-cutting move for IBM.”
The company capped its subsidy for health costs for retirees in the 1990s, his email said.
He said the company chose to make the shift because of a belief that there will be benefits available through the exchange that weren’t available to employees under the company’s group plan. Many retirees will have more choice and flexibility in plan options at the same or lower cost, he said.
“This transition to Medicare Exchange offers IBM retirees more choice and better value than IBM can provide through existing group plans,” his email said.
There is not correlation with the Affordable Care Act, Shelton said. Oct. 1 is the date for the launch of government-run health exchanges, which are getting off the ground as part of the federal health care overhaul.
“We’ve seen these private exchanges mature, and felt comfortable that Extend Health would be a great match at this time,” Shelton’s email said.
To inform retirees about the changes, IBM is hosting briefing meetings around the country. A meeting has already been held in San Jose, Calif., and another was scheduled in Austin, Texas. A meeting will be in the Research Triangle Park area this month, Shelton said.
Herald-Sun reporter Laura Oleniacz contributed to this report.