GE, IBM Ending Retiree Health Plans in Historic Shift

By Alex Nussbaum - Sep 9, 2013

America’s biggest employers, from GE to IBM, are increasingly moving retirees to insurance exchanges where they select their own health plans, an historic shift that could push more costs onto U.S. taxpayers.

Time Warner Inc. (TWX) yesterday said it would steer retired workers toward a privately run exchange, days after a similar announcement by International Business Machines Corp. General Electric Co. (GE) last year said it, too, would curb benefits in a move that may send some former employees to the public insurance exchanges created under the 2010 Affordable Care Act.

While retiree health benefits have been shrinking for years, the newest cutbacks may quickly become the norm. About 44 percent of companies plan to stop administering health plans for their former workers over the next two years, a survey last month by consultant Towers Watson & Co. (TW) found. Retirees are concerned their costs may rise, while analysts predict benefits will decline in some cases.

“Things are going to change dramatically,” said Ron Fontanetta, a partner at New York-based Towers Watson, which advises GE and other large companies. “Over the next two to three years, we see a much more aggressive rethinking of what employers are going to provide.”

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http://www.bloomberg.com/news/2013-09-09/ge-to-ibm-ending-retiree-health-plans-in-historic-shift.html