Vanishing retiree health care benefits
the first wave of baby boomers makes the transition from career track to riding
the retirement rails, here's a warning from those who've already pushed off from
corporate life: Don't believe everything you're told, even if you have it in writing,
especially where post-retirement health insurance is concerned.
light at the end of the retirement tunnel may be an oncoming train, after all.
From corporate penthouses to state legislatures, a move to cut and, in some cases,
eliminate retiree medical benefits altogether has caught hold. It's leaving upcoming
retirees with a dilemma many don't even realize they're facing -- how are they
going to pay for future medical needs not covered by health insurance or Medicare?
For many, the answer will redefine their retirement.
|Have retiree health benefits? Read the
fine print. Your best-laid plans could derail.
slip through fingers
Ron Harper started working for Allstate Insurance
Co. in 1989 after 22 years in the grocery business. As a representative of the
insurance giant, Harper had an enviable future retirement with a 401(k),
generous pension program and health insurance for himself and his wife. But when
the company restructured its employment policies, Harper and more than 6,000 fellow
agents found most of their benefits had slipped through their fingers.
he still sold Allstate Insurance, he was no longer considered a company employee.
Instead, he and the others were reclassified as "independent agents,"
and they lost their company pension plan and post-retirement medical insurance
benefits. Now Harper, who once paid $130 a month for family medical insurance
coverage, has a self-paid policy with a whopping $5,450 deductible, supplemented
by a health savings account he has established.
example, Harper's wife underwent a recent colonoscopy, it cost the couple about
$3,000 out of pocket. Harper observes that one downside to losing medical coverage
is that many don't have the money to pay for preventive health care, so it falls
by the wayside.
Now 55, the Thomson, Ga., resident publishes
a newsletter for Allstate agents and is one of more than 6,000 plaintiffs in an
unresolved lawsuit against the company.
Harper says his medical
insurance premiums run him about $500 a month, with another $500 going into his
medical savings account. "I don't see how I can ever retire," he says.