Some local General Electric retirees say they wouldn’t have left the company if they had known they would lose their health insurance.
Former hourly and production employees over 65 with the IUE-CWA Local 301 are unhappy that they now have to register for supplemental health care through a private exchange by Jan. 1.
“When you retire you make decisions and those decisions are based on if you could afford to retire and have enough money,” said Fran Ahl, vice president of the Local 301 in Schenectady. “I might not have retired knowing that would happen. Everything was fine when we were working.”
Retirees say GE reneged on their agreement to keep their benefits with the company when they retired. A coalition of labor unions led by IUE-CWA filed a federal class-action lawsuit Nov. 9 claiming GE violated federal labor law.
The suit was filed in federal court in the Northern District of Ohio by the IUE-CWA, the industrial division of the Communication Workers of America, which includes electricians, machinists, steelworkers and professional and technical engineers.
“There is a class-action lawsuit against GE by us to revert back to $123 a month, which they promised us when we went out would be there,” said Bob Bombard, president of the Local 301. “They took it away from salaried retirees a year ago and now they’re taking it away from hourly retirees. Once you sign out you are no longer an employee and we have no rights.”
GE notified hourly retirees over the summer that current post-65 retiree health care plans wouldn’t exist as of 2016. The move impacted the last group of former employees still eligible to receive them.
Bombard, who retired from GE in 1997, said the exchange does not appear to offer a lot of options for insurance to supplement Medicare and that payments would be more than they could afford.
In addition to the health plans offered to retirees and their spouses through the exchange, GE will provide $1,000 a year for plan premiums and other eligible expenses. That money is not guaranteed, Bombard said.
The lawsuit says the changes could mean up to $4,850 in co-payments for retirees, which GE previously would have absorbed under the prescription drug plan. Thousands of retirees are on fixed incomes and cannot afford the cost, the suit states.
“I’m looking at $302 out-of-pocket per month next year,” said Karl Asmus, secretary of the Local 301. “They added $1,000 for help, but that is eaten up with just the health care plan itself. The drug plan will eat another $3,000 a year out of me.”
GE spokesperson Chris Horne said GE’s shift to offer health plans through a private exchange, called OneExchange, is consistent with the trends of other large companies.
Towers Watson, the New York City firm that runs OneExchange, found in a study that 71 percent of employers will use a private exchange by 2016, up from 32 percent in 2014.
Horne said offering health plans through an exchange provides more choices for GE retirees. Also, because GE never fully subsidized its post-65 plans, some retirees have found their costs to be the same or less than before, she said.
“Our program provides post-65 retirees with access to a quality private exchange, additional cost-saving options and with more choice in coverage,” she said in a statement.
Former salaried employees had the option to register for a health plan through the private exchange last year.
David Pratt, who retired from GE in 2007, said he was pleased with the process at the time and happy with his new health care plan.
Pratt said when GE alerted retirees about the shift in health care it came as a surprise. He said he is sympathetic with how hourly retirees feel going through the exchange this year.
“Although it was a surprise, the surprise was followed up with a package of services that actually made the transition easier,” he said. “There were many options. I would say it was about 25 different plans offered through different vendors.
Two retirees — Evelyn Kauffman of Schenectady and Dennis Rocheleau of Wisconsin — sued over the changes on behalf of former salaried employees last year. A federal judge in June denied GE’s request to dismiss the case. The lawsuit is pending.
The latest lawsuit on behalf of hourly employees seeks monetary damages arising from a claimed breach of the collective bargaining agreement, declarations that the changes are unlawful and either prevention of implementation of the moves or restoration of the original terms if changes have already been implemented.
More than two dozen GE retirees are named as plaintiffs in the suit, along with the unions. At least seven of the retirees named are from the Capital Region.
Horne said the unions publicly characterized the benefits as “reasonable” and that the benefit levels are the same as those being challenged now.
“Although unions don’t negotiate on behalf of current retirees, in this year’s collective bargaining negotiations, the unions negotiated and accepted the post-65 health care benefits for represented employees who would retire under the current agreement (June 2015 – June 2019),” Horne said in a statement.
John Czarnecki Jr., who retired 12 years ago, said he believes the change in health care, which he says will cost him and other retirees more a month, would impact the local community.
“This will have a long-term ripple effect on Schenectady and the charities we donate to,” he said. “People will be looking at the big-box stores to save money. They are not only hurting us, but the local economy and small businesses.”
Bombard encourages all GE retirees to attend the Local 301 meetings, which are held every third Thursday of the month at 1 p.m. at 366 Broadway.
Retirees with questions about the private exchange are asked to call the GE Pension Benefit Inquiry Center at 1-800-432-3450 between 9 a.m. and 5 p.m.
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