VZ Retiree Medical Plan Rising Costs - Fiduciary Ignorance?

Questions and answers about medical benefits, severance pay outs. etc.

VZ Retiree Medical Plan Rising Costs - Fiduciary Ignorance?

Postby potysmantx on Fri Oct 06, 2017 2:00 am

I am a 60 year old former Verizon employee who retired with a medical insurance premium subsidy (as a part of my retirement package) earned over a 28+ year career with one employer, namely Verizon.

How does Verizon continue to get away with preying on retirees to shoulder increasing burdens of rising health care costs?

For the 2016 medical plan year, self-insured Verizon negotiated a premium reduction with their medical insurance carriers for the Verizon Retiree Group Health Plan. While medical premium expense decreased year over year, deductibles and co-payments were increased.

Verizon did not share this 2016 plan year premium expense reduction with retirees. So; while retirees were being hit with higher deductibles and higher co-payments, they were also hit with significantly higher premiums (15% or greater premium increases from the prior 2015 plan year).

Target Plan EPN Plan Medical Premium Retiree
Premiums Premiums Deductible Subsidy Premium
2015 $ 25,698 $ 21,482 $ - $ 12,807 $ 8,675
2016 $ 25,495 $ 20,699 $ 400 $ 10,670 $ 10,029

% Decrease -0.8% -3.6% N/A -16.7% N/A
% Increase N/A N/A Infinite N/A 15.6%

Verizon has denied my claims and appeals that a medical plan fiduciary (working in the best interests of its plan members) would share the insurance premium reductions with retirees to offset higher deductibles and co-payments. Instead, I believe Verizon intentionally and selfishly kept the premium reductions (and artificially and significantly decreased company premium subsidies) to bolster Verizon’s bottom line (as a self-insured entity).

When is doing the right thing for customers, employees and retirees going to come back in style?

I offered the following change to the subsidy calculation which would better share medical premium cost with plan members and better align medical subsidies with changes in cost:

Target Plan EPN Plan Premium Retiree
Premiums Premiums Subsidy Premium
2015 $ 25,698 $ 21,482 $ 13,429 $ 8,053
2016 $ 25,495 $ 20,699 $ 13,383 $ 7,716

% Decrease -0.8% -3.6% -0.3% -4.2%

I was denied.

Verizon arguing that this is the way they have always handled medical plan premium subsidy calculations does not make it right.

And, this failure to recognize plan shortcomings and failure to make changes in the plan which would be in the best interest of the plan members (retirees, in this case), I believe breaches Verizon’s fiduciary responsibilities.

What do you think?

Steve Potysman
potysmantx
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