Under the agreement, Fidelity and Extend Health will provide retiring participants losing company-sponsored health plan coverage access to resources and support to get quality coverage at a price they can afford. Together the two companies will also assist plan sponsors transitioning from employer-sponsored retiree medical insurance as they communicate changes and help retirees select a private insurance option that best suits retirees’ unique needs.
Access to the Extend Health exchange enhances Fidelity’s Plan for Life workplace guidance experience by incorporating retiree health care into retirement planning conversations. Participants can receive help selecting private insurance from more than 80 national and regional health insurance providers with thousands of plans to meet their specific needs. The choices provided to the participant are based on several factors including their desired level of coverage and medical needs, financial situation and availability due to geographic considerations.
Fidelity will begin offering the service to its plan sponsor clients during the third quarter, in time for this year’s benefits enrollment season.
“With health care being one of the most underestimated costs in retirement and Medicare not covering all medical expenses, an increasing number of employers are asking for help in transitioning their employees into retirement,” said Christi Rager Wise, senior vice president, Fidelity Investments. “Our agreement with Extend Health will expand the financial guidance Fidelity provides employees transitioning into retirement while also helping them tackle one of the biggest risks to financial security in retirement: the cost of health care.”
Fidelity Investments estimates a 65-year-old couple retiring in 2012 needs $240,000 to cover medical expenses throughout retirement (see “Health Care Costs Could Consume Retirees Income”).