United Parcel Service and about 8,000 of its age 65 and older Medicare-eligible non-union retirees are reaping the benefits of the giant Atlanta-based package delivery company moving health care coverage to a private insurance exchange.

For years, UPS had offered a single self-insured health insurance plan to Medicare-eligible retirees.

“There was no choice. It was one size fits all,” said Al Rapp, corporate health care manager at UPS. “We didn't think it was a great value” in many cases for retirees.

Today, though, UPS retirees have many plan choices. That is because in 2011, UPS decided on another approach. It contracted, effective Jan. 1, 2012, with Aon Hewitt, to offer coverage to the retirees through an insurance exchange — Aon Hewitt Navigators — the benefit consultant set up several years ago.

Now, the retirees, depending on where they reside, can have nearly three dozen plans to choose from. Those plans vary widely in how much in medical costs the plans will pick up and, as a result, the premiums they charge for coverage. Through that expanded choice, retirees are much better able to find a plan that best fits their health care needs.

“We knew that providing choices would be a lot better than what retirees had before,” Mr. Rapp said.

The retirees, like before, apply UPS contributions — the amount based on how many years the retirees worked for UPS — toward the premium charged by the plans.

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If the UPS premium contribution is more than the premium charged by the plan, retirees then can apply the difference to pay for out-of-pocket expenses, such as costs that fall under a plan's deductible.

Going from just one plan design to many plans, though, could be overwhelming for retirees. To prevent confusion, the exchange provided to the retirees benefit advisers to help the retirees evaluate and select a health care plan appropriate for their individual medical needs.

“The retirees quickly saw the value of the benefit advisers and became very positive about the change,” Mr. Rapp said. “We’ve had a 20-year history and a great relationship with Aon Hewitt. I knew they would provide the quality services our retirees would need.”

Just as the benefit advisers helped retirees choose a plan offered through the exchange during open enrollment, retirees can turn to exchange staff throughout the year for assistance with numerous issues, such as questions about a claim.

As a result, UPS no longer has to devote time and corporate resources to administer the retiree health care benefits program.

“That allows us to concentrate on meeting the many other needs of our people,” Mr. Rapp said.

Above all, moving to a private health insurance exchange, Mr. Rapp said, was not a cost issue as the company’s retiree health care plan contribution formula has not changed.

“It was a choice issue. We knew the plan choices would be better than what retirees had before,” he said.