GE is Dropping Retiree Coverage

Ann H

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A family member of mine has been a long-time employee of GE, and he received a letter stating that GE will no longer offer retiree life insurance and post-65 health benefits to salaried employees, effective 1/1/2015. It does not affect those who are currently retired or who will retire before 1/1/2015.

I think this is a clear message to Washington. PPACA was supposed to subsidize retiree benefits for large corporations, but one of the largest corporations in the US is dropping retiree benefits. Hint, hint, hint - they will probably drop employee benefits after 2014 too.
 
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A family member of mine has been a long-time employee of GE, and he received a letter stating that GE will no longer offer retiree life insurance and post-65 health benefits to salaried employees, effective 1/1/2015. It does not affect those who are currently retired or who will retire before 1/1/2015.

I think this is a clear message to Washington. PPACA was supposed to subsidize retiree benefits for large corporations, but one of the largest corporations in the US is dropping retiree benefits. Hint, hint, hint - they will probably drop employee benefits after 2014 too.

That's a real big deal, thanks for sharing!
 
There have been rumblings about this for a few years and actually many employees "heard through the grapevine" it would happen back in 2010.

And yes...GE's home office is about 28 minutes away from here so nothing is private!
 
My dad escaped before they made a big change in retiree benefits at GE - starting out in Cleveland.

He was three years away from retiring with the max pension when they offered their senior engineers and early out package. Most said no including my dad. His new assignment? India. All of a sudden that no turned to a yes and he took the deal.

But I watched, while growing up, GE cut, and cut, and cut benefits from starting from the 70's and the gutting of pretty much all perks happened under Welch.

Of course, GE shut down appliance park in Columbia MD in the 80's since their small appliance division was third in sales. If it wasn't #1 or #2 it got killed off.
 
GE's home office is about 28 minutes away from here so nothing is private!

So, are you saying they don't close their blinds at night when you are sneaking around looking in windows?
 
I couldn't remember the details about retiree coverage subsidies in PPACA, but this excerpt from a 4/20/2012 article in the Wall Street Journal helps explain it.
Conquering Retirement: When Retirees Face Health-Plan Cuts - WSJ.com
Health-care overhaul. Another reason employers have used to explain why they're cutting retiree benefits is that recent health-care legislation has made such coverage costlier. Here's how it works: Companies receive a 28% federal subsidy up to $1,330 per retiree, tax-free, to help pay for prescription-drug coverage. The subsidy was created when the Medicare Prescription Drug Act went into effect in 2004, after employers threatened to drop their drug coverage unless they were given an incentive to retain it. The subsidy is lucrative: AT&TT +0.68% and Verizon Communications, VZ +0.40% for example, each estimated they would receive at least $1.5 billion over a decade to pay for prescription drug coverage.

So what has changed? Under the Affordable Care Act, employers will continue to receive the money tax-free. But after 2013 they no longer will be able to deduct it.

Employers had to recalculate their obligations to reflect the loss of the future tax deduction. AT&T and Verizon took charges of roughly $1 billion each, according to public filings. Caterpillar, CAT +0.94%DeereDE +0.07% & Co. and dozens of other companies also took charges.

Though this was an accounting hit, companies continued to receive the same amount of government subsidies. Yet many claimed higher costs were forcing them to cut benefits.

Government subsidies. The Affordable Care Act has provided employers with opportunities to get still more money from the government to pay for retiree benefits. For example, the Early Retiree Reinsurance Program, a short-term program that went into effect in 2010, provided $5 billion in subsidies to help cover health care for some retirees.

The program was intended to encourage employers to continue to offer coverage to retirees 55 and older who aren't yet eligible for Medicare. The fund reimburses 80% of the eligible claims between $15,000 and $90,000 per retiree.

About half the subsidies went to public employers. Among private employers, AT&T received the most ($240 million) and Verizon came in second ($163 million). Employers could use the money to reduce their costs, retirees' costs or both. Alcatel-LucentALU -2.17% used the proceeds to lower both retirees' and the company's costs, a company spokeswoman says, and General MotorsGM +0.82% used the subsidy to pay its salaried retirees' contributions from April to December 2011, according to a letter it sent the retirees.

The Affordable Care Act was beneficial to employers in other ways. Unlike regular health plans for active workers, retiree plans don't have to extend dependent coverage to age 26, unless they choose to do so. AT&T, which has plans that cover both active employees and retirees, covers dependents up to age 26; most of Verizon's retiree plans don't.​
 
For any newbies to the Forum...let me warn you about Ann. She typically posts accurate, helpful and very relevant information that should be read twice so you can absorb as much as you can.

And there are others (I am one of them) that simply post senseless drivel, quotes from George Costanza, and mischievous rants about fictitious SEO accomplishments.

That's what makes this Forum great. The diversity!
 
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