Towers Watson Offers Risk Transfer Solution for Retiree Medical

Total liability for 2013 was down from total liability for 2012, which was $338 billion. The decrease was mainly due to increases in discount rates, Towers Watson says. 

The analysis performed by Towers Watson shows 501 Fortune 1000 companies have retiree medical liability, while 499 do not. Of the 501 companies that do, 67% had no assets backing the liability. 

“While total liability for retiree medical is in the billions—much of it unfunded—the undercurrent issue is that companies are exposing themselves to the risk of a variety of unknown variables with adverse consequences,” says Mitchell Cole, managing director of Towers Watson Retiree Insurance Services. 

Towers Watson’s proprietary Longitude Solution is a turnkey retiree medical exit solution that leverages a customized group annuity, issued by a highly rated insurance company, that transfers the obligation to pay retiree health benefits from the corporate sponsor to the insurer. 

The patent-pending solution lets employers overcome the traditional barriers to fully exiting their legal, accounting and regulatory responsibilities for retiree medical benefits. Towers Watson contends it also gives retirees security and peace of mind by guaranteeing nontaxable funding for medical benefits for the rest of their lives from a highly rated insurance company. 

The solution is available to employers that are considering a retiree medical exit strategy or clients of Towers Watson’s OneExchange private Medicare exchange, which supports and administers the Longitude Annuity solution. 

More information is here.