Fidelity® and Extend Health Partner to Help Retiring Employees Transition to Private Health Coverage

Strategic agreement provides comprehensive guidance to employees transitioning from employer-sponsored medical coverage to individual insurance

BOSTON – Fidelity Investments® and Extend Health, a Towers Watson company, today announced a strategic agreement to enhance Fidelity’s retirement guidance capabilities to include retiree health care. This agreement will simplify the transition process for millions of retiring Americans as they shift from employer-sponsored medical coverage to the individual Medicare market for health insurance.

Under the agreement, Fidelity and Extend Health, the nation’s leading private Medicare exchange, will provide retiring participants who are coming off 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. Fidelity will begin offering the service to its plan sponsor clients during the third quarter, in time for this year’s benefits enrollment season, which typically begins in the fall.

“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.”

Every day, more than 7,500 Americans turn 65, the age when many workers opt to retire1. With fewer employers providing retiree medical insurance and an average couple expected to need $240,000 for medical expenses during retirement2, many people are looking to supplement Medicare with additional private insurance. The agreement between Fidelity and Extend Health will help retiring workers bridge this gap when they are seeking more coverage than Medicare, but face the daunting task of choosing from the myriad of options on the private market.

“Preparing for retirement can be one of the most overwhelming times in a person’s life,” said Bryce Williams, Towers Watson’s Managing Director of Exchange Solutions. “Fidelity already guides millions of Americans toward a more financially secure future. With Extend Health, the combined expertise will ease the process further by providing clear choices in their health coverage options.”

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 now 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.

In addition to referring retiring employees to private health care options through Extend Health, Fidelity is also expanding its capabilities to offer plan sponsors retiree medical account (RMA) support, including recordkeeping and reimbursement services, retiree workshops and meetings, and strategic communications expertise.

About Towers Watson and Extend Health
Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. With 14,000 associates around the world, we offer solutions in the areas of benefits, talent management, rewards, exchanges, and risk and capital management. Founded in 2004, Extend Health, a Towers Watson company, operates the largest private Medicare exchange in the country. For more information, visit towerswatson.com or extendhealth.com.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $3.9 trillion, including managed assets of $1.7 trillion, as of December 31, 2012. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.

1) www.census.gov defines Baby Boomers are those Americans born between 1946 and 1964.
2) Fidelity business data, “Retiree Health Care Cost Estimate,” May 2012.

Extend Health and Towers Watson are not affiliated with Fidelity Investments.

Guidance provided by Fidelity is educational in nature, is not individualized and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions.

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