Retirees and baby boomers throughout the nation are wondering
with great trepidation, what would happen to them if their
health care coverage were simply taken away?
Many fear that the current economic crisis in America will
speed up that process. It has already occurred with retirees
of some of America's largest corporations, and municipalities
are threatening to follow suit. According to Paul Miller,
executive director of the national retiree advocacy group,
ProtectSeniors.Org, the situation is as dire as the bailout
was for the auto industry, Wall Street and America's major
"There are currently an estimated 18.5 million American
retirees and baby boomers in the United States with health
benefits being significantly threatened," Miller says. "If
cancelled by the corporations they once worked for, most
would be dumped into the federal and state healthcare
systems. In effect, this means their former employers would
be getting an additional back-door federal bailout at the
expense of the taxpayer."
The health care coverage Miller is referring to is earned
retiree benefits that tens of millions of Americans earned
and paid for during their working years. He says that for
whatever reason, many corporations never actually set that
money aside and are using the current financial turmoil to
threaten the cancellation and further reduction of these
Much of his organization's hope is placed on a bipartisan
legislative proposal- titled the Emergency Retiree Health
Benefits Protection Act in the 110th Congress -- which gained
the support of 88 bipartisan co-sponsors. The bill would
prohibit employers from making post-retirement cancellations
or reductions of health benefits that retirees had earned.
"Companies would be made to live up to the financial
commitments made to their employees and retirees, and most
importantly, would do so without placing mandates on the
employers as to what health plans they provide or monetary
ceilings on the amount of health benefits", Miller says.
Behind its efforts, ProtectSeniors.org has harnessed the
support of retirees from 285 companies, 36 unions, 76
municipal, state and federal retiree groups, in addition to
14 retiree associations.
"Lately, economists, talk show hosts, journalists and even
politicians have been blaming America's retirees and union
workers for the economic downturn, calling our earned
retirement health coverage legacy costs and burdensome," says
C. William Jones, a retiree from Verizon Communications and
president of the 100,000-member Association of BellTel
Retirees. "I, and tens of millions of retirees like me,
worked decades to earn those benefits, taking less pay and
forgoing days off to fund them. For companies to now imply
that retirees are a liability to them and America is morally
offensive and absolutely inaccurate."
Advocates of the legislation argue that over many years,
companies used the promise of post-employment health care
coverage to induce employees to stay with that employer or,
in some cases, to take early retirement. Companies did not
agree to pay retiree benefits out of the goodness of their
hearts or social well-being; there were significant financial
benefits and tax breaks for them. They further explain that
employers benefited financially by not having to pay Social
Security and payroll taxes on these benefits.
"Funding these benefits could be deferred by companies in
years when earnings were low, unlike payroll that must be
paid on time," Jones says. "Since pensions are based on a
percentage of wages, companies also saved on long-term
University of Alabama School of law professor Dr. Norman
Stein, an expert on the nation's Employee Retirement Income
Security Act (ERISA) pension law testified in favor of the
proposal at a congressional hearing in the fall, saying
Congress should pass legislation "that would make it
difficult or perhaps impossible for an employer to terminate
retiree health benefits after an employee has retired." The
long time advisor to AARP and the Pension Rights Center
argued, "Congress could try to level the playing field for
employees with clear, reasonable and consistent rules."
Just last year the U.S. Supreme Court and 'Equal Employment
Opportunity Commission ruled that it is legal for companies
to reduce or eliminate earned health benefits for retirees
ages 65 and over, due to a loophole in the ERISA pension
Acting to close that loophole with legislation to protect
America's retirees, Rep. John Tierney (D-Mass.) says, "Unlike
pension plans, ERISA does not impose mandatory 'vesting'
requirements with respect to health benefits. Consequently,
many courts have upheld that there is no legal protection for
employees. (The Emergency Retiree Health Benefits Protection
Act) remedies this and ensures that the reasonable health
benefit expectations of retirees from ERISA-sponsored
regulated group health plans are fulfilled."
"America's retirees are not here asking for a handout or a
bailout," Miller says. "We merely want companies to live up
to the promises they made. Give us the health benefits we
earned and paid for over decades of loyal service."
For more info
Go to ProtectSeniors.Org or call 202/434-8193.
Courtesy of ARAcontent