As more than 60 percent of employers are examining their long-term plans for retiree health strategies, plan sponsors as well as retirees could find value and cost savings with retiree health exchanges, according to a new analysis by Aon Hewitt, a human resources consulting and outsourcing firm.

While 20 percent of respondents provide guided entryway to the individual Medicare retiree plan market via individual health exchanges, two-thirds of respondents are open to this strategy in the future. With this kind of model, respondents could cut their gross retiree medical spend by 20 to 50 percent yearly.

"The economics of providing traditional employer-sponsored retiree health coverage are changing, and employers are seeking the most cost-effective and tax-efficient delivery models," says John Grosso, senior vice president of health and benefits for Aon Hewitt. "Retiree exchanges provide access to these individual market efficiencies along with a wider choice of health plans than exists in the traditional employer-provided retiree health plan. Very often, retirees can purchase individual Medicare Advantage, Medigap or Medicare Part D plans at lower rates than the employer can offer for comparable coverage due to the federal subsidies, Medicare Part D program enhancements and market-based competition found in the individual market."

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