U.S. technology giant IBM said it will close down its current healthcare plan for retired workers and subsidize healthcare for Medicare-eligible retirees.
The change will affect 110,000 IBM Medicare-eligible retirees, The Wall Street Journal reported Saturday.
Instead of offering the company-sponsored insurance plan, IBM said it would give money to retirees to use in buying insurance if they enroll in the Extend Health, a privately run Medicare insurance exchange.
IBM said rising healthcare costs had made the current plan unsustainable. The current retiree insurance option will end Dec. 31.
The announcement was made in a notice to retirees, reviewed by The Wall Street Journal and confirmed by IBM.
"Cost increases under our current retirement group health care plan are no longer sustainable for you. Healthcare costs under IBM's current plan options for Medicare eligible retirees will nearly triple by 2020, significantly impacting your premium and out of pocket costs," the notice said.