From the January 1st, Raleigh, N.C. News & Observer...William Games, a 67-year old retiree in Camden, enters the new year expecting to pay about $2,000 more for health care.
As of today, the company where Games worked for 42 years has stopped providing supplemental Medicare coverage. The company, Embarq, also eliminated a $500 annual cash subsidy that had helped pay for medications.
Now Games and nine other retirees in North Carolina and Florida are suing Embarq to get their health benefits back. The phone company, formerly known as Sprint, eliminated free life insurance for retirees in September and is implementing the other cuts today to save about $30 million a year in operating expenses.
The retirees, who filed a lawsuit Friday seeking class action status on behalf of about 14,000 Embarq retirees in 18 states, say they were misled into believing they had benefits guaranteed for life.
"It sure is a lot of money for all the retirees," said Games, a former lineman and construction foreman. "You were promised all this stuff after 40-some years with the company, and all of a sudden -- bam! -- you don't have it any more."
Embarq is among a growing roster of companies cutting retiree benefits. Large employers with local operations that have made the unpopular cuts include Nortel Networks, Goodyear and Caterpillar.
Company policies usually include small print reserving the right to change benefits, said Raleigh employee benefits lawyer Steven Long.
But Stewart Fisher, a Durham labor lawyer who is representing the Embarq retirees, says the phone workers have a strong case because the company systematically misled its workers into believing the retiree benefits were permanent. As a result, Fisher said, some workers took early retirement to lock in benefits, and many accepted lower salaries in exchange for lifetime benefits.
See the entire story here,http://www.insurancenewsnet.com/article.asp?a=top_lh&neID=200801011180.3.167_1ac7000000b1673c, courtesy of Thomson Business Intelligence Service.
As of today, the company where Games worked for 42 years has stopped providing supplemental Medicare coverage. The company, Embarq, also eliminated a $500 annual cash subsidy that had helped pay for medications.
Now Games and nine other retirees in North Carolina and Florida are suing Embarq to get their health benefits back. The phone company, formerly known as Sprint, eliminated free life insurance for retirees in September and is implementing the other cuts today to save about $30 million a year in operating expenses.
The retirees, who filed a lawsuit Friday seeking class action status on behalf of about 14,000 Embarq retirees in 18 states, say they were misled into believing they had benefits guaranteed for life.
"It sure is a lot of money for all the retirees," said Games, a former lineman and construction foreman. "You were promised all this stuff after 40-some years with the company, and all of a sudden -- bam! -- you don't have it any more."
Embarq is among a growing roster of companies cutting retiree benefits. Large employers with local operations that have made the unpopular cuts include Nortel Networks, Goodyear and Caterpillar.
Company policies usually include small print reserving the right to change benefits, said Raleigh employee benefits lawyer Steven Long.
But Stewart Fisher, a Durham labor lawyer who is representing the Embarq retirees, says the phone workers have a strong case because the company systematically misled its workers into believing the retiree benefits were permanent. As a result, Fisher said, some workers took early retirement to lock in benefits, and many accepted lower salaries in exchange for lifetime benefits.
See the entire story here,http://www.insurancenewsnet.com/article.asp?a=top_lh&neID=200801011180.3.167_1ac7000000b1673c, courtesy of Thomson Business Intelligence Service.
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