A Health Benefit Lifeline for Retirees
12/07/2007

A Health Benefit Lifeline for Retirees

By Robert S. McDonald

Scenario 1
You’re over 55 and your company is “downsizing.”

In an effort to entice employees to leave, the company offers a “golden handshake” featuring an enhanced pension and health benefits package for both you and your family.

You decide to take the offer and leave your company’s employ.
A month later, you receive a letter stating that your company no longer offers or provides healthcare and that you benefits are terminated immediately.

Scenario 2
You’ve been retired for a number of years. You and your wife live on a modest pension, minimal Social Security and are on Medicare. It’s not easy, but you’re “getting by.”

One day you get the same type of letter from your former employer.

Sound familiar? It should because it’s happening every day. Maybe it’s already happened to someone you know or worse, to you…
The effect on the people in both scenarios are quite different.

The retiree at 55 years of age will not be eligible for Medicare until he or she is 65 which means no coverage, or the purchase of a Healthcare Insurance Plan at outrageous rates for ten years! (It seems none of our elected politicians seem to be interested in why healthcare costs are increasing at 10-15% a year!)

The older gentleman is on Medicare but Medicare covers only an average of 80% of medical costs. He was counting on his company plan to pick up the other 20% on at least a good portion of it. With that plan gone, he faces the possibility of being financially wiped out should a serious illness strike him or his wife.

At present, a retiree has nothing legally in place to force companies to keep the promises they made to their employees on the day they retired.

The cash value of a retiree’s pension package is guaranteed by the Employee Retirement Income Security Act of 1974, a federal law. Unfortunately, no provision is made to protect the healthcare portion of the retirement package. This means that your last employer can terminate your healthcare benefits at any time for any reason and the retiree at present, has no rights or even a reason to enter into litigation to restore what was promised in writing. After years of seeing this situation go unchallenged, (retirees are an easy target lacking the legal funding that corporations have), Representative John Tierney (D. Massachusetts) introduced federal legislation to correct this blatant injustice.

It’s called H.R. 1322: Emergency Retiree Health Benefits Protection Act of 2005. The bill was introduced in Congress in March of 2005.

What the bill proposes are
1. Prohibits group health plans from making post-retirement reductions in retiree health benefits;
2. Requires plans to adopt provisions barring post-retirement cuts in retiree health benefits;
3. Requires employers to restore benefits reduced after retirement;
4. Provides an exemption for employers who are unable to restore benefits because they would experience substantial business hardship to be determined by the Secretary of Labor; and, create a loan guarantee program to assist employers in restoring retiree health benefits.

This bill was referred to a subcommittee and was killed by the subcommittee taking no action for twenty-one months. The bill died when the term of the 109th Congress expired on the last day of 2006. During that twenty one months, members of our retiree group sent letters, emails and certified mail to Representative DeLauro, Senator Lieberman, Representative Chris Murphy and the Chairman of the subcommittee where the bill was held up. We have yet to get the common decency of an answer from any of them. Maybe the lure of corporate PAC and lobby funding was just too great.

To his credit and with our gratitude, Congressman Tierney reintroduced the bill in Congress on March 5, 2007. The bill was again sent to a subcommittee (House Budget) on the same day. The bill again languishes in that subcommittee and has for the past eight months with again no action taken to bring the bill to a vote in Congress.  Our group figured that with a Democrat controlled Congress, the bill would finally have a chance to become law. When no action was taken, we sent a certified letter to Speaker of the House, Nancy Pelosi asking her when the bill would be moved for a vote. To this day, we have not received a reply from Speaker Pelosi.

This country was founded as a “representative democracy,” where elected officials do the will of the people. It appears so far that our elected officials represent only themselves.

H.R. 1322 was sent to subcommittees twice for “further study.” After twenty one months between 2005 and 2006 and eight months so far in 2007, being “further studied,” what is it that they don’t understand? It’s a fact that 90% of all bills sent to a subcommittee die there through inaction.  It’s up to present and future retirees to make sure that H.R. 1322: the Emergency Retiree Health Benefits Protection Act of 2007, is part of the ten percent that become the law of the land.

I don’t think it’s too much to ask that corporations search around for their lost honor and keep their promises to the people who built their companies. Unfortunately, in this day and age, it will require a federal law to get them to do it. If you want to keep your benefits or restore benefits already lost, the time for action on our part is now. Get out your phone book, go to the blue pages to find out the numbers of your elected federal officials. Don’t call once and forget it. Keep calling them every day. If you have a computer, get their email addresses and bury them in messages every day. Sit down every day and send a letter to each one of them, and keep writing.

Your messages should highlight the following. I’m a retiree and I want to know what you’re doing to move H.R. 1322 The Emergency Retiree Health Benefits Protection Act of 2007 out of subcommittee and to a vote, and if you’re not doing anything, WHY NOT!! You might also mention that there are thousands of retirees in Connecticut and they all vote.

Tell them, by your actions, that H.R. 1322, the dirty little secret “They didn’t want you to know about is now out in the open.”

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