AT&T retirees may have been surprised, or even shocked,
recently when the company sent information
related to open enrollment for the retiree medical benefits.
Retirees under the age of 65, who are not
eligible for Medicare, saw premium increases of
hundreds of dollars a month for coverage under
the standard PPO plan.
Retiree health benefits are a permissive
subject of bargaining, and for the past two
rounds of bargaining, the company has refused to
negotiate with the union over the terms of
the retiree health benefit package.
The reason for the cost shift is a result of
the employer contribution cap kicking in.
• The fixed cap has the effect of limiting the
employer’s contribution and any health
cost increases above that level are
shifted to retirees.
• Retirees are required to pick up the amount
of costs that exceed the cap.
• In 2012 average per retiree costs exceeded
the cap by 1.3%.
• Costs grew by over 14% between 2012 and
2013, exceeding the cap by 14.4%.
There is an alternative plan
which does not have a premium, but it does have a higher
deductible and higher out of pocket requirements
than the PPO plan.
The company refused to bargain with the union
over the impact of the cost increases on
retirees. Nevertheless, the union was able to persuade the
company to make some adjustments to the
plan it had originally planned to impose on retirees. As a
result of union input, the company reduced
premiums for retiree only coverage by about $37 per
month; reduced deductibles in the alternative
plan from $1000 individual/$2000 family to
$500 individual/$1000 family; reduced the prescription drug
deductible in the alternative plan and the
plan for Medicare retirees by $135.
While the union was able to get the company to
make some adjustments to the massive cost
shifting it had planned, we all agreed it was not what we
would have negotiated. Some in the company
have told retirees that the reason for the extraordinary
increases is the Affordable Care Act.
Nothing could be further than the truth. In fact, there are
only two provisions of the Affordable Care Act
that would impact AT&T’s retiree health
• First, improvements to Medicare, including
full coverage of preventive care and
recapturing overpayments to Medicare Advantage plans.
• Second, the Early Retiree Reinsurance
Program, which set aside funds for
employers who offer retiree health
benefits, rebated $213.8 million to AT&T
between 2011 and 2012 to offset the cost
of claims from early retirees.
Both these provisions will have the effect of
easing the company’s cost burden. The
company has chosen not to share that cost relief with
CWA believes the company should have done more
for retirees. That after a banner year,
with healthy profits, and significant dividends for
shareholders, the corporation could have
done much more to assure that the former employees who built
the company would have a quality,
affordable health plan.
We encourage retirees to express their views
on the status of their health plans directly
to AT&T CEO Randall Stephenson at the address
208 South Akard Street
Dallas, Texas 75202-4206