More Employers Taking Aim At Retiree Health Benefits

The fate of retiree benefits is the "canary in the coal mine," as one policy analyst put it recently, for what everyone else needs to worry about as America's health care crisis deepens.

In other words, if the canary dies and retirees lose their health care, active employees could be the next target.

CWA, like all unions, is fighting hard in contract talks to salvage retiree benefits and has stood with other unions in their fights. But with benefits for a pre-Medicare retiree and spouse running as much as $22,000 at major telecom companies, for instance, leaders say the only real answer is national reform. "Every other industrialized country has figured out how to provide health care to all its citizens. It's about time we do the same," said CWA Executive Vice President Jeff Rechenbach, who heads the union's telecom operations.

Here are a few of the employer battlegrounds in recent years:

• Embarq, the former Sprint local telephone service, announced last fall that it was eliminating health subsidies for more than 14,000 retired, Medicare-eligible, union and management employees and their dependents, and also dropping pre-Medicare retiree benefits entirely for workers hired after Jan. 1, 2007.

CWA has filed unfair labor practice charges with the National Labor Relations Board over Embarq's unilateral decision to end coverage for workers not yet retired, contending that it is a mandatory issue for bargaining.

"We all understand that medical costs are soaring, but abandoning commitments to our most vulnerable seniors is not the answer," said Jimmy Gurganus, vice president for Telecommunications. "We invite Embarq to join us in pushing for a national solution to this national problem rather than joining the low-road employers that are adding to the ranks of Americans who can't afford good health care."

Last fall, retirees and active CWA members were joined by local officials and labor leaders at rallies in. North Carolina, Tennessee, Virginia, Ohio, Pennsylvania, Florida, New Jersey, Oregon and Washington.

Retiree Sandra Muntis of Elida, Ohio, wrote a letter to her local describing her husband's multiple sclerosis, and her own diabetes and said that without health coverage, "we could not afford procedures requested by physicians to keep us in good health."

• General Motors last year altered its obligation to retiree health care with a plan that the Auto Workers will be in charge of managing, with contributions from the company. The plan, known as a VEBA, takes the liability off the books for General Motors. Like many unions, the UAW was faced with bad choices.

CWA President Larry Cohen said VEBAs are "a tactic, not a strategy," in the struggle for real reform of America's health care system. Toward that end, he praised the UAW?for negotiating $15 million to create a National Institute for Health Care to study the issue and push for comprehensive reform.

• In 2003, 14,000 IUE-CWA members and another 4,000 from the United Electrical Workers shut down 64 General Electric facilities in 23 states over increased health care costs for workers and retirees.

The two-day walkout in advance of bargaining drew attention to GE's attempt to shift $40 million in costs to workers and retirees despite the company's record $16 billion profit in 2002. The company ultimately agreed to far less cost-shifting, further offset by strong wage and pension increases.

• At Verizon, managers have already taken big hits on retiree health care. In 2004, the company changed its policies so that new management hires will get no health care upon retirement and can't even buy into the company plan on their own. Management employees with less than 15 years of service now get no subsidy for health care when they retire, but can pay 100 percent of the cost themselves.

Verizon made the changes at the same time it yanked its defined benefit pension plan for managers, who don't have the benefit of bargaining rights.

• While retirees at United Airlines now pay more toward their health benefits, the battle fought by AFA-CWA during the airline's bankruptcy and restructuring forced the company to keep its promise to protect the bulk of the coverage.

About 2,500 flight attendants took United at its word that it would cover comprehensive medical benefits for those who retired before July 1, 2003. Later, the airline tried to renege with a "bait and switch" that AFA-CWA said would cost many retired flight attendants up to $650 a month on pensions that average $1,200 a month.

AFA-CWA waged a vigorous media and leafleting campaign, winning the support of the bankruptcy judge. Ultimately they reached an agreement with United that union leaders said was "significantly better" than what the airline had wanted.