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March 21, 2018
GE unions sue over retiree health insurance changes
Updated On: Feb 05, 2018

GE unions sue over retiree health insurance changes

Former hourly workers at General Electric Co. on filed a federal class action lawsuit Monday, charging their former employer violated federal labor law by changing the health benefits provided for retirees over 65.

The lawsuit is separate but similar to one already moving forward by retirees who were salaried. Together, some 65,000 retirees are affected by the change in benefits.

GE has announced that beginning Jan. 1, 2016, it will end retiree medical plans meant to supplement Medicare. Instead, the company will offer former workers the option of buying health plans through a private health exchange, akin to those offered by the government through Obamacare.

GE has told retirees that they will receive $1,000 a year to purchase plans through these exchanges, said John M. Phelps, president of the Waterford-based chapter of IUE-CWA, which represents about 300 retirees covered by the lawsuit.

But GE won’t guarantee the annual subsidy for the life of the retirees, Phelps said. Meanwhile, the change in benefits leaves many retirees with a huge increase in prescription drug costs.

GE spokesman David Lurie said the company’s benefits changes are consistent with trends among other large corporations.

“GE acted properly, lawfully and consistent with collective bargaining requirements in making changes to the post-65 supplemental Medicare and prescription drug benefits for retired union members,” Lurie said.

GE has previously said it will save $586 million in future obligations by canceling the Medicare plans and instead offering reimbursements of about $1,000 a year to retirees who obtain Medicare-supplement policies.

The hourly retirees’ lawsuit was filed in federal court in the Northern District of Ohio, led by the IUE-CWA, the industrial division of the Communication Workers of America, and including members of unions representing electricians, auto workers, machinists, steelworkers, and technical engineers.

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