By Elizabeth G. Olson <\/p>\n
FORTUNE -- As health insurance is reshaped, some major corporations are switching the way they offer coverage to current employees and retirees, in a move that is likely to pave the way for major change to the American health care system. <\/p>\n
IBM (IBM) -- which has about 110,000 retirees -- is planning to shift its traditional company-administered plan to private Medicare health insurance exchanges for people who are 65 and older. Retirees can use company subsidies to buy Medicare Advantage plans or other coverage to supplement the services they receive under the federal program. <\/p>\n
On the heels of IBM's retiree changeover, drug-store giant Walgreen Co. (WAG) announced this week that it would move its 160,000 current employees to Aon Hewitt's Corporate Health Exchange starting next year. Two major companies, Sears Holdings Corp. (SHLD) and Darden Restaurants (DRI), have already signed their current employees with Aon Hewitt, which says that it is now providing services to some 330,000 active employees. <\/p>\n
IBM's move could be a win all around -- savings for companies trying to keep a lid on contributions to retired employee medical costs, lowered costs because of more insurance carrier competition, and a wider range of coverage options. Or, as the health care overhaul kicks into gear, it could usher in an era of confusion as people struggle to navigate online insurance marketplaces. <\/p>\n
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One point of confusion is the word \"exchange.\" A private exchange, like Extend Health, where IBM's retired workers are being directed, or Aon Hewitt, is different from public health insurance exchanges, called for under the Affordable Care Act in every state, where government-subsidized premiums help those with lower incomes. <\/p>\n
With private exchanges, companies pay a set amount annually to cover the company's obligation for health care, and workers use that sum to buy coverage of their choice. <\/p>\n
\"A private exchange is a fancy word for more choice,\" says Paul Fronstin, head of health research for the Employment Retirement Benefits Institute. <\/p>\n
Although the institute conducts research independently, one of its founders was IBM, which was fairly blunt about its reasons it opted to switch how it provides health care insurance to its retirees. <\/p>\n
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