Towers Watson Launches New Service for Employers That Subsidize Early Retiree Health Benefits

October 14, 2014

Towers Watson has unveiled a new personalized decision support service that will help pre-Medicare retirees determine whether they are better off using a subsidy from their former employer or taking a tax credit from the federal government. Under the Patient Protection and Affordable Care Act, pre-Medicare retirees can use either a tax-advantaged employer subsidy or a federal tax credit to defray the cost of their health insurance premiums — but not both. The service is designed to help early retirees optimize their health insurance spending without “double dipping.”

Employer clients of Towers Watson’s OneExchange requested the service to make it easier for their early retirees to evaluate and enroll in health plans on the individual market. Retirees can take advantage of the service by phone through a OneExchange benefit advisor or go online and access a guided self-service tool at no charge.

For employers offering subsidies, Towers Watson will create and manage health reimbursement arrangements (HRAs) for their early retirees. Early retirees accepting employers’ funding have the option of buying individual plans directly from insurers or from public exchanges. Early retirees who accept a tax credit must choose plans from the public exchanges.

For more information about the new service, click here for the full release.

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