Towers Watson & Company will be working with Extend Health Inc. to create a Medicare plan purchasing system aimed at employers that are getting out of the business of offering retiree health benefits.

Towers Watson, New York (NYSE:TW), will help employers set up and run retiree Medicare plan exchange access programs, and Extend Health Inc., San Mateo, Calif., will supply the exchange, Towers Watson says.

The Extend Health exchange offers about 3,500 private Medicare plans from 73 national and regional carriers.

The program should help retirees who are eligible for Medicare get more individual coverage choices at a lower cost than they would likely get if they were shopping entirely on their own, Towers Watson says.

Towers Watson notes that about 60% of the employers that still offer retiree medical plans say they may make big changes in 2012 or 2013.

- Allison Bell

Other retiree health coverage from National Underwriter Life & Health: