Time Warner joins IBM in moving retirees off health plan due to rising costs

The Time Warner Cable office is shown in Carlsbad, California November 5, 2012. REUTERS/Mike Blake (UNITED STATES - Tags: BUSINESS) - RTR3A2HZ

Time Warner Inc. says it plans to move its retired workers off its health plan and provide money to them to purchase coverage on private exchanges at the beginning of next year due to rising costs, following a similar move by IBM.

Company spokesman Keith Cocozza confirmed the plan Sunday to the Associated Press.

Both companies will allocate money to special accounts for retirees, which they can use in purchasing coverage.

Such moves are meant to lower costs and are part of a corporate trend away from providing traditional retiree health benefits as costs rise.

The Wall Street Journal reported Saturday that IBM decided to change coverage for retirees because the rising cost of health care makes its current plan unsustainable unless the company chose to increase premiums.

The Associated Press contributed to this report