Megacorp Reneges on Retiree Health Care

[Just_Steve]

Of course, but that’s why public employees are so lucky, that they are not also having to support their own retirement benefits while also paying taxes. I’m sure that’s what was meant about being able to sleep much better if the legislation passes, right?

The state made a "promise" to me and others and if it takes legislation to make them keep their word, so be it.

 

[foxfirev5]

Every November it's the wait and see game of whether or not the retiree medical will be offered. It's not cheap and probably not much different from what I could get under ACA. The auto withdrawal of payment from my old RMSA account eases the pain. I simply don't count those funds as an asset. Just presaved medical coverage. We've also done Roth conversions to manage income if it comes to that.

While they currently offer a medicare supplement program I've been told it's not really an advantage since it's not competitive nor subsidized in any manor.


I learned early on in my career never to trust that the company, large or small, has your best interests in mind. Get what you can from them. Declare victory and move on!

 

[JoeWras]

Public employees also pay taxes.

It should then be an obligation of the employees who are retired to stay in that state that gave them the pension too, right?

 

[pb4uski]

The below is a summery of legislation in the NYS Assembly and Senate to protect municipal workers. It has broad support and many cosigners. If it passes I will sleep even more soundly than I do now.

"Prohibits the diminution of health insurance benefits of public employee retirees and their dependents or reducing the employer's contributions for such insurance; defines employers to include the state, municipalities, school districts, and public authorities and commissions."

I don't see how any responsible legislator could vote for such legislation... but then again the NYS Assembly isn't particularly known for responsibile behavior so it may well pass.

But even if it passes don't get too comfortable because subsequent legislation could repeal that law... laws get repealed all the time.

Ask Illinois how it is working out for them... they have a similar provision relating to pension benefits but in their state constitution so their hands are tied behind their back in dealing with a $160 billion pension deficit.

https://herald-review.com/news/stat...cle_73e4463a-a992-5865-8ee3-0a1190e1a448.html

 

[brett]

I never viewed benefits as an entitlement. Yes, our benefits were progressively reduced over the years just like others. And they were reduced for future retirees. The benefits were not part of our DB plan.

They also plowed significant amounts of money, over and above the normal, into our DB plan in order to bring the funding level up to 100 percent. Even during challenging business climates.

 

[DAYDREAMER]

I'll name my Mega Corp-Boeing. DW qualifies for the ER health care which I will be covered. We are Speea Union represented, and every 4 years a new contract is negotiated. Boeing has eliminated ER health care for new employees since 2007 on. I'm concerned that the work force pool has more post 2007 employees than pre 2007, and next contract, Boeing throws them a bone to eliminate retiree health care.

ACA is our back up if employer ER healthcare gets dumped. Our real health care is exercise, and taking care of ourselves. We'll stay nimble on the health care issue, but do not see it as a tent pole item to ruining our ER.

 

[stepford]

Are the folks who are so annoyed at the public employee pension guarantees burdening the taxpayer similarly annoyed by guaranteed pensions to our military veterans? Seems like a promise is a promise either way.

 

[Just_Steve]

It should then be an obligation of the employees who are retired to stay in that state that gave them the pension too, right?

Interesting concept.

I don't see how any responsible legislator could vote for such legislation... but then again the NYS Assembly isn't particularly known for responsibile behavior so it may well pass.

But even if it passes don't get too comfortable because subsequent legislation could repeal that law... laws get repealed all the time.

Ask Illinois how it is working out for them... they have a similar provision relating to pension benefits but in their state constitution so their hands are tied behind their back in dealing with a $160 billion pension deficit.

https://herald-review.com/news/stat...cle_73e4463a-a992-5865-8ee3-0a1190e1a448.html

While our DB is guaranteed by state constitution our medical is not, back in the mid 90's the agency I worked for took a contract @ 0% raise supposedly to fund retiree health care so in my opinion we already paid for it with real money.

 

[ivinsfan]

I'll name my Mega Corp-Boeing. DW qualifies for the ER health care which I will be covered. We are Speea Union represented, and every 4 years a new contract is negotiated. Boeing has eliminated ER health care for new employees since 2007 on. I'm concerned that the work force pool has more post 2007 employees than pre 2007, and next contract, Boeing throws them a bone to eliminate retiree health care.

ACA is our back up if employer ER healthcare gets dumped. Our real health care is exercise, and taking care of ourselves. We'll stay nimble on the health care issue, but do not see it as a tent pole item to ruining our ER.

Yes pit the new guys again the old guys a classic corporate method.

 

[meleana]

I just got a letter today from my Megacorp. They gave notice that effective January 1, 2021, they are terminating their Medicare Supplement Plan for all retirees. They have been paying a maximum of $2100 each per year for the retiree and his/her spouse for Medigap and Part D plans. I guess I always knew that they could do this if they wanted, but I thought they were a quality company who wouldn’t do that to its retirees. I guess I was wrong about that.

It will be a $4200 annual hit to my budget once DW turns 65 in two years (I’ve been on Medicare for one year now). I can’t tell you how bummed I am.

I’m really glad now that I elected to take my pension as a lump sum rather than an annuity. You really can’t count on a corporation to uphold its promises to you.

So sorry. Exactly right on the lump sum pension. My husbands has already been cut off at the knees and with bond prices right now, the lump sum amount is even lower. But when he retires in another year or two, we are still taking the lump sum-IF he still has that option- not that his pension was something we could live on anyway. These big companies have really screwed their employees. It just gets worse and worse every year.


I will need health insurance when he retires as I am no longer working. He will go on Medicare. We get ZERO for nothing.



My only pension is $29.00 per month WHEN i turn age 65 from a job I had for 3 years with a hospital. At least I can maybe buy some wine with it to forget my misery.

 

[NameTaken2]

It is a Cold Hard World in Corporate America-
and getting colder every day.


Getting old sucks, but starting a career now as a 20-something appears to present challenges that I'm happy not to face.


Patter appears to have become
Top echelon prospers, while squeezing life out of all below.


No idea where this will lead, but direction is depressing.

 

[CaptTom]

No idea where this will lead, but direction is depressing.

What I find most depressing is the number of people who accept this, and think it's OK. And keep electing folks whose only mission is to perpetuate it.

 

[Winemaker]

Megacorp sold my division to a buyer who did not offer health insurance to retirees. Megacorp discontinued healthcare coverage to retirees one year later to the divisions they kept. They also gave cash stipends, based on seniority, to the retained employees, not retirees, once they were to reach retirement, to help pay premiums. I was a 35 year employee and would have received a $100,000 stipend, had they not sold me off.

 

[mamadogmamacat]

I missed out on a buyout by a few months that would have netted me about 60K. And while i still have mega corp retiree ins, the premiums have gone up 9 to 10 percent each and every year. So eventually, when one considers the relatively high deductible at least as compared to while I was employed, it will be actually be more affordable, even without subsidies to give serious consideration to ACA plans depending on networks of course. Right now the retiree plan network is much broader, but that changes a bit each yr too.

its a race as to whether I can stay on this plan until Medicare kicks in, or not.

The trend id definitely to reduce employer based benefits, whether one is retired or still working.

 

[indiajust]

my positive spin

I view corporate unwillingness to offer benefits as a good thing.



Follow along...


The creation of tax free benefits is a historical anachronism, a consequence of wage and price controls during WW2, which slowly spiraled out of control as taxes and regulations increased.


I prefer compensation in cash, not tax free benefits. Free benefits encourage consumption and have no competitive restraints. Part of the reason health care has bloated is because there are no prices, no price competition, no taxes, and an all you can eat structure.



Once health care returns to being a personal expense, it will have prices. No complicated benefit plans, no administration overhead, ... no influence on a hiring decision. You become a health care customer instead of a plan dependent.


Eliminating corporate/government influence over benefits will immensely simplify employment. It transforms dependents into customers and the creates the possibility of competition; incentives for productivity gains and cost reductions. All of which will reduce the price and improve the health care field. For perhaps the first time since WW2.



I realize there is pain involved, but the Gordian knot must be cut.



I rolled my past employers plans into my IRA. Most of them are bankrupted and gone. Had I trusted them with a pension, I would be bankrupt and gone also.

 

[pb4uski]

I view corporate unwillingness to offer benefits as a good thing.



Follow along...


The creation of tax free benefits is a historical anachronism, a consequence of wage and price controls during WW2, which slowly spiraled out of control as taxes and regulations increased.


I prefer compensation in cash, not tax free benefits. Free benefits encourage consumption and have no competitive restraints. Part of the reason health care has bloated is because there are no prices, no price competition, no taxes, and an all you can eat structure.



Once health care returns to being a personal expense, it will have prices. No complicated benefit plans, no administration overhead, ... no influence on a hiring decision. You become a health care customer instead of a plan dependent.


Eliminating corporate/government influence over benefits will immensely simplify employment. It transforms dependents into customers and the creates the possibility of competition; incentives for productivity gains and cost reductions. All of which will reduce the price and improve the health care field. For perhaps the first time since WW2.



I realize there is pain involved, but the Gordian knot must be cut.



I rolled my past employers plans into my IRA. Most of them are bankrupted and gone. Had I trusted them with a pension, I would be bankrupt and gone also.

I agree but for somewhat different reasons... I belive that health insurance should attach to the person so that one's health insurance doesn't get disrupted as a result of a job loss or a job change... same for life insurance and disability insurance... companies could then just offer higher compensation to compete with other employers.

I think the US individual insurance market would be quite robust if there were over 325 million potental insureds that insurers were vying for.

 

[mamadogmamacat]

Yep, the history of benefit evolution has been discussed before. That's a good point. But i have next to zero confidence the evolution to a price consciousness approach will ever happen. It's just not what enough people seems to want or understand without fear and panic setting in.
So we are stuck with one bureaucratic system or another, be it corporate, ACA, or Medicare.
And until recently, the corporate one was the best of a "bad" world.

 

[Chuckanut]

Megacorp sold my division to a buyer who did not offer health insurance to retirees. Megacorp discontinued healthcare coverage to retirees one year later to the divisions they kept. They also gave cash stipends, based on seniority, to the retained employees, not retirees, once they were to reach retirement, to help pay premiums. I was a 35 year employee and would have received a $100,000 stipend, had they not sold me off.

Your story is just another reason why we need to drastically reform our retirement savings system in the USA. 401k's were never meant to be the sole retirement plan for people, but they are turning out to be the only thing most people have these days. The current plans/rules are just to limited for that role.

Most important, things like retirement plans and health insurance need to controlled by the worker, not Mega Corp or the politicians.

Dare we hope that Congress will wake up and actually reform the laws so as to help people prepare better for retirement?

 

[SumDay]

I agree but for somewhat different reasons... I belive that health insurance should attach to the person so that one's health insurance doesn't get disrupted as a result of a job loss or a job change... same for life insurance and disability insurance... companies could then just offer higher compensation to compete with other employers.

I think the US individual insurance market would be quite robust if there were over 325 million potental insureds that insurers were vying for.

I couldn't agree more. I have never understood why health insurance is tied to employment. Life insurance isn't, auto insurance isn't... Our world would be so very different if it weren't a component of a j*b.

 

[Rianne]

I am not a lawyer, but if a person says "work for me doing xxxx and I will pay this salary plus, this pension, plus medical", and I do the work.... Isn't my work over may years consideration, thus a valid contract is in place. Maybe not a written contract, but we all know contracts don't always have to be in writing.

Obviously, there is something I don't know about labor law. Anybody care to enlighten me?

Illinois is in very hot water over this very concept. Pensions and HC due to government (state) employees must be paid, unless the law is changed. The pension fund was invested very poorly. Not the employees fault, so regardless if the state is going bankrupt, the law protects the employees. Megacorps somehow make their own rules and if they are sued over reneging on that promise, good luck.

 

[pb4uski]

^^^ My recollection that it is the Illinois state constitution that would need to be changed, which makes the problem even more difficult.... changing a law is much easier.

On the second part, there is a nuance of a difference in that in most cases these retiree medical benefits were past practices and not contractual... which is why companies can "change their minds"... though to be fair those retiree medical benefits were generally disclosed as being subject to change at the company's discretion at any time.

Pensions are more formal promises and subject to ERISA so companies have less wiggle room when it comes to pensions.

 

[Midpack]

I couldn't agree more. I have never understood why health insurance is tied to employment. Life insurance isn't, auto insurance isn't... Our world would be so very different if it weren't a component of a j*b.

I don't disagree, but health insurance doesn't have to be tied to a job either, you can buy it on the open market (maybe) or through ACA now. Only (highly) subsidized health insurance is often tied to a job.

But again, I hope that changes one day, like every other developed nation in the world...they all pay (much) less than we do, and over half have better medical outcomes as well. Present US health insurance isn't a system, and it's a travesty. Special interests protecting the status quo stand in the way, as they have for decades...

 

[Midpack]

Illinois is in very hot water over this very concept. Pensions and HC due to government (state) employees must be paid, unless the law is changed. The pension fund was invested very poorly. Not the employees fault, so regardless if the state is going bankrupt, the law protects the employees. Megacorps somehow make their own rules and if they are sued over reneging on that promise, good luck.

Didn't hear the whole story, but supposedly Rahm Emanuel is going to Springfield (today?) to encourage the state to change the law and add new revenue sources. Since he's not running for re-election, it's a lot easier to take "brave" but obvious positions.

Mayor Rahm Emanuel outlined his proposal Wednesday to offset potentially financially crippling future public pension payments, calling for the city to tap revenue from a Chicago casino and legal recreational marijuana while backing a constitutional amendment that would allow for a change in public employees’ retirement benefits.

Emanuel, who will leave office in May, delivered his remarks to the City Council as Chicago braces for nearly $1 billion in new required annual retirement payments just five years from now. Those increased payments ramp up beginning next year.

 

[ERD50]

I view corporate unwillingness to offer benefits as a good thing.



Follow along...


The creation of tax free benefits is a historical anachronism, a consequence of wage and price controls during WW2, which slowly spiraled out of control as taxes and regulations increased.


I prefer compensation in cash, not tax free benefits. Free benefits encourage consumption and have no competitive restraints. Part of the reason health care has bloated is because there are no prices, no price competition, no taxes, and an all you can eat structure.



Once health care returns to being a personal expense, it will have prices. No complicated benefit plans, no administration overhead, ... no influence on a hiring decision. You become a health care customer instead of a plan dependent.


Eliminating corporate/government influence over benefits will immensely simplify employment. It transforms dependents into customers and the creates the possibility of competition; incentives for productivity gains and cost reductions. All of which will reduce the price and improve the health care field. For perhaps the first time since WW2.



I realize there is pain involved, but the Gordian knot must be cut.



I rolled my past employers plans into my IRA. Most of them are bankrupted and gone. Had I trusted them with a pension, I would be bankrupt and gone also.

Agree on every point. -ERD50

 

[pb4uski]

I don't disagree, but health insurance doesn't have to be tied to a job either, you can buy it on the open market (maybe) or through ACA now. Only (highly) subsidized health insurance is often tied to a job. But again, I hope that changes one day, like every other developed nation in the world...they all pay (much) less than we do, and over half have better medical outcomes as well. Present US health insurance isn't a system, and it's a travesty.

So perhaps a good first step would be to prohibit employer provided health insurance and make the playing field between employer-provided and individual health insurance level for tax purposes (one way or the other). It may well be that a humongous group will provide the competitive stimulus for positive change if health care costs can also be addressed... if that doesn't work then nationalization may be necessary.