Connecticut Telecom Retirees Face Losing Health Benefits while union fails to see benefits of eg faustmanlab.org, pubmed.org ridtori + bcg, uspto.gov inventor search faustman, ratner eg the lancet p106 jan 14, 1978
Under new union contract, Frontier Communications ends coverage for some retirees
Struggling broadband provider Frontier Communications Corp. is ending health benefits for some of its retirees in Connecticut, according to the local union.
Private companies have been phasing out retiree pensions and health coverage for new hires for decades. But rarely do they stop retirement benefits for former employees already receiving them, according to health and insurance industry executives.
Frontier, which has 22,000 employees in 29 states, is trying to reduce its $17 billion debt load, and late last month faced calls to file for bankruptcy. The company this week reported its third-quarter results, showing a net loss of $345 million.
A spokesman for Frontier declined to comment.
More than 100 Frontier retirees are expected to lose their health benefits under a new collective bargaining agreement, said Dave Weidlich, president of CWA Local 1298, which covers more than 2,000 Frontier workers. Union members are currently voting to ratify the new two-year contract, with the final tally scheduled for Nov. 21.
Frontier isn’t required by law to negotiate retiree medical benefits and company representatives declined to do so during recent negotiations, Mr. Weidlich said.
Sean O’Leary, who took an early retirement package in 2017, said he and other former longtime employees feel betrayed.
“We spent many a day and night working storms and away from our families,” said Mr. O’Leary, 60 years old, a former cable repairman. “I made a good living that allowed me to retire early, I’m not biting the hand that fed me. But, 31 years I helped build that company.”
Most companies look to reduce benefit costs by shifting retirees away from group indemnity plans and supplements and into managed-care or private Medicare exchanges, said John Grosso, senior vice president at insurance broker Aon.
Canceling retiree benefits for existing retirees is rare because of the negative public-relations implications, he said, with businesses typically taking this step only when they are in financial turmoil or bankruptcy.
“It’s kind of a brutal thing to do to existing retirees who might not have any other recourse,” Mr. Grosso said. “It’s not taken lightly, it’s not done often.”
Unlike accrued pension benefits, which are protected under federal law by the Employee Retirement Income Security Act, there are no rules in place forbidding companies from terminating retiree medical benefits, Mr. Grosso said.
Mr. O’Leary and many of his fellow retirees in Connecticut started working for the “telephone company” when it was owned by Southern New England Telecommunications Corp. SNET was acquired in the late 1990s by SBC Communications Inc., which later changed its name to AT&T Inc. Frontier, based in Norwalk, Conn., bought the company in 2014.
“At the time, we were thrilled that a local company in Norwalk was going to invest in Connecticut jobs and the Connecticut infrastructure network for broadband,” Mr. Weidlich said. “We had no vision of them mismanaging the business to the financial status it’s in today.”
The collective bargaining agreement reached with the union last month doesn’t include medical coverage for 120 to 130 retirees who retired between 2014 and February 2017. Another 43 employees who took retirement packages in late 2017 will likely be eligible for higher-cost medical plans until they qualify for Medicare, he said.
Part of the new contract includes a voluntary severance package, designed to reduce head count, that provides three years of medical coverage. “They were willing to [offer health benefits] for new retirees, but they were not willing to address this small number of people that they’re bailing out on,” Mr. Weidlich said.
It’s not clear when the affected retirees’ health coverage will end. Mr. Weidlich said he expects Frontier to send letters to retirees after the union contract is ratified.
Mr. O’Leary, who two years ago moved to Florida with his wife, said he is trying to schedule a medical procedure on his hip before he has to switch to more expensive insurance. He is planning to look for a part-time job to pay for his increased health-care premiums, which he expects will cost $800 a month through an Affordable Care Act plan compared with the $195 a month he paid for coverage from Frontier.
He will continue to receive a pension from Frontier and said he knows it could be worse. “You have to count your blessings for things you do have, but boy it would sure be nice to not have that burden and to not have to face going back to work,” he said.
Monique LaBonte, who retired in 2016 after 36 years with Frontier, said she’s worried about how she’ll pay for the expensive, custom-made compression sleeves and gloves that she has to wear due to complications from breast-cancer treatment. Her health problems forced her to retire earlier than the 58-year-old would have liked from her physically demanding job, which involved wiring and troubleshooting at the central office.
Ms. LaBonte said she was approved for social-security disability and uses Medicare as her primary insurance, but it doesn’t cover her medical garments. The supplemental coverage she gets from Frontier, which costs $90 a month, did cover the items. She said she’s hoping she can find new supplemental insurance.
Write to Kate King at Kate.King@wsj.com
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