SOURCE: www.rockefeller.senate.gov
Rockefeller: “It is irresponsible and wrong for Century Aluminum to revoke the hard earned retiree health benefits that many of its employees deserved”
Washington, D.C.—Senator Jay Rockefeller this week sent a letter to U.S. Labor Secretary Hilda Solis to express concern with Century Aluminum’s decision to eliminate health care benefits for its retirees. Because of the company’s actions, nearly 600 retirees and their spouses will no longer receive the retiree health care benefits that they earned over the years. Rockefeller has urged the company several times to reinstate these benefits, including personally calling Century Aluminum’s president and CEO. He alerted Secretary Solis to this important issue and also pressed her to take action to help these retirees while also ensuring that other companies’ employees do not face similar situations in the future.
“It is irresponsible for Century Aluminum to revoke the hard earned retiree health benefits that many of its employees deserved after years and in some cases decades of work for the company,” said Rockefeller. “I understand the financial problems that Century Aluminum faces, but it can’t solve those problems by revoking retiree health care benefits to its employees. These employees planned to have their health care paid for during their retirement years. Particularly during these difficult economic times, this decision is especially painful. These retirees deserve better than to have their health care benefits ripped out from under them. I hope that Secretary Solis and I can work together and find ways to help the retirees at Century Aluminum as well as prevent similar situations in the future.”
The text of Rockefeller’s letter to Secretary Solis from February 23 follows:
Dear Secretary Solis,
I write to you today about an issue that is important not only to my constituents in West Virginia, but also to employees across the country – the post-retirement elimination of retiree health care benefits. In light of your strong commitment to America’s workforce, I am hopeful that we can work together to protect retiree health care benefits and help retirees whose benefits have been eliminated.
This issue is of particular concern to me because over the past two years, an employer in my state, Century Aluminum in Ravenswood, West Virginia, unilaterally eliminated health care benefits for its retirees. According to reports, this decision will impact nearly 600 retirees, both over and under the age of 65, and their spouses. Despite being accepted into the Early Retiree Reinsurance Program, which could help offset some of the costs of continuing retiree health care coverage, the company has refused to participate, informing me that the program “did not go far enough.”
The Century Aluminum retirees have informed me that they were promised lifetime retiree health care coverage, and accepted lower wages in exchange for that promise. However, a federal district court in West Virginia looked at the contract and denied the retirees’ request for a preliminary injunction, and the case is now working its way through our courts.
As I am sure you know, the loss of these benefits has caused unimaginable physical, emotional, and financial stress for these workers and their families. Health insurance is expensive enough for healthy individuals, and until the health care reform law is fully implemented, will be difficult or impossible to afford for the retirees under age 65 who suffer from pre-existing health conditions. In addition, those retirees over age 65 who are enrolled in Medicare are now being forced to go without their supplemental retiree coverage.
While it is important that employers and employees continue to have the right to enter into contracts and come to agreements about what benefits will be offered and when, this situation with Century Aluminum retirees is not isolated. Other cases have arisen throughout the country involving essentially the same issue: retirees who believed that they were promised lifetime health care benefits have seen those benefits unilaterally eliminated by their employers, and these decisions have been upheld by our courts.
We must prevent any instance in which the promise of lifetime retiree health care benefits is broken, or in which employees are misled into believing that they have lifetime health care benefits when the employer reserves the right to terminate or reduce those benefits. One option is to improve disclosure requirements so that employees are explicitly informed of when and if their retiree health care benefits vest, and if their employer reserves the right to unilaterally terminate those benefits. I also believe that we need to find additional ways to help retirees, like those at Century Aluminum, who are suffering right now from the loss of their health care benefits.
I am very much concerned about the fate of Century Aluminum’s retirees in West Virginia and would greatly appreciate your suggestions about what we can do through regulations, legislation, or other avenues to help these retirees today and prevent instances like this in the future.
I am also asking for your help in making certain that eligible Century Aluminum retirees receive the full benefit of their COBRA coverage as swiftly as possible. Even though Century Aluminum ended the retirees’ coverage as of December 31, 2010, it is not clear that all eligible retirees have been adequately informed of how to access their COBRA benefits. I am very concerned about this lack of clarity, given the need to make sure that Century Aluminum retirees have continuous health care coverage. Indeed, the extreme anxiety about continuity of health care coverage is taking a severe toll among retirees. Tragically, one Century Aluminum retiree, who was known to be extremely worried about his wife’s access to health care during the transition to COBRA coverage, suffered a sudden fatal heart attack only last week.
Thank you for your attention to this matter, and for all that you are doing daily to make things better for America’s workforce.
Sincerely,
John D. Rockefeller IV
cc: The Honorable Kathleen Sebelius