IBM will give the retired employees a lump sum of cash toimage spend with the exchange.  We certainly have a number of people in the insurance exchange business.  Here’s one example that was in news earlier this year where a former Humana executive started on, only took 3 employees to get it up and running.

One More Insurance Exchange Started by Former Humana Executive–Currently There Are Over 100 Private Exchanges in Place To Compete With State Exchanges

Anyone who is eligible for Medicare fits into the new plan.  I took a quick look at the Towers Watson website who is running the exchange and they do a lot of things with consulting to include alternative capital for insurers, Responding to US Health Care Reform with consulting for employers, Faster and Better Financial Information for Insurers with actuary analytics (similar in math to what quants do) relative to pension funds to help manage hedging operations, controlling healthcare costs with data and analytics, incentive risk assessment, improving employee health and productivity, rethinking retirement financing, using social media to connect with employees, reinsurance needs…and they have the exchange.  I am guessing they have a “loaded” portfolio of all kinds of reports and studies:)

In addition there are bids coming in for the re-insurance imagedivision of the company at present and they work with actuary contracts, the equivalent of a quant that creates models for retirement funds.  The company is the largest private Medicare exchange  with thousand of of private Medicare plans from 85 insurance carriers.  They have a new web broker contract with the government with CMS, mainly focusing on the employer side. 

Anyway, interesting to see a heavily consulting insurance firm in the exchange business , but you know there’s money there and with their actuary services maybe some of it gets rolled in to an over all consulting contract.

Some current retirees are concerned as they don’t know what they are going to have to pay and how far the IBM cash provision will go.  BD 

International Business Machines Corp. IBM -0.61% plans to move about 110,000 retirees off its company-sponsored health plan and instead give them a payment to buy coverage on a health-insurance exchange, in a sign that even big, well-capitalized employers aren't likely to keep providing the once-common benefits as medical costs continue to rise.

The move, which will affect all IBM retirees once they become eligible for Medicare, will relieve the technology company of the responsibility of managing retirement health-care benefits. IBM said the growing cost of care makes its current plan unsustainable without big premium increases.

IBM told retirees that its current retiree coverage will end for Medicare-eligible retirees after Dec. 31, 2013, according to documents reviewed by The Wall Street Journal and confirmed by IBM.

Privately run insurance exchanges are starting to find interest from companies looking to control health-care costs for active employees as well. The approach was adopted last year by Sears Holdings Corp. and Darden Restaurants Inc. Many insurers and benefits-consulting firms are setting up such exchanges.

Few employees can now count on big companies to provide retirement health care. Only 28% of large companies that offer health benefits to employees offered retiree coverage in 2013, down from 34% in 2006 and 66% in 1988, according to a 2013 survey by the Kaiser Family Foundation.


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