Termination of Retiree Health Benefits

[Guest S Craig]

Is there a recommended procedure for terminating the health plan for retirees? I am working with a small employer who has always provided retiree benefits (paying only 25% of the premium), but they would like to remove the retiree class from eligibility.

Thanks for any input.

[GBurns]

I have not seen a recommended procedure and doubt that there could be one since it is a facts and circumstances driven issue. What might have been promised and how it might have promised could differ from employer to employer.

What I do recommend is that any employer who desires to take such action should seek competent experienced legal advice.

**********

After I posted, I wondered why an employer would want to do this especially a small employer.

How many retirees and how much money is involved here?

What will the effect on morale of the current employees be?

Also since a small employer is quite often owner operated or family, wouldn't stopping retiree health benefits also have the effect of also stopping the benefits when this owner and family members retire? At only 25% of premium it might be a case of cutting off one's nose to spite one's face. I am sure there are other ways to handle this cost. Maybe this employer just needs a better insurance agent and also possibly better tax and business planning.

[Guest S Craig]

Well, thank you for your frank input. While I may not have had experience terminating a retiree health plan, I am their long-term insurance agent, and am very concerned that whatever decision they make, they are following any proper procedure.

The consideration is being made carefully, which is why we were looking for any guidance.

However, I have located this information for anyone who may be interested in the EBSA's view of the termination of retiree benefits.

retireehealthbenefits.pdf

[GBurns]

I trust that you meant "Long Term Care" insurance agent. I was referring to group health/medical insurance agent.

Notice that the thrust of the EBSA publication is Get the documents, read the documents, consider seeing a lawyer.

[oriecat]

I took it that he meant he has been their ins agent for a long time...

[leevena]

GBurns...You might want to consider some tact and consideration for others. I have been a member for a few months now and have noticed that for the most part your responses are usually good and provide some good thoughts for people to consider. But the tone you often take can be offensive, to say the least.

Just like Oriecat, I also took your comments to mean that S Craig was their health agent. And for you to ask "I wondered why an employer would want to do this especially a small employer" illustrates to me that you must be clueless about that market and the needs of such groups.

Sorry to have to post this, but hey, I'am Jersey born and raised.