benefits targeted by Qwest
Retirees' lawyer calls caps 'despicable'; legal action possible
By Rachel Brand
Rocky Mountain News
Thursday, October 26, 2006
Qwest will cap health and life-insurance benefits for thousands
of former workers next year. The Denver-based
telecommunications company will pass 100 percent of health
insurance cost increases on to tens of thousands of Qwest and U
S West retirees, and cap life-insurance benefits at $10,000.
Retirees previously got the equivalent of one year's salary in
life insurance and paid only health-insurance co-pays.
Retirees are "absolutely furious," said Nelson Phelps, executive
director of the Association of U S West Retirees. He received
180 e-mails on Wednesday about the proposed caps and at least
three phone calls from retirees in tears.
"What I'm hearing is, 'How can (Qwest Chief Executive Officer
Dick) Notebaert break the contracts and promises that we had?' "
Phelps said. "These people can't believe anybody would do this
Qwest, for its part, called the decision "difficult."
"A change like this is not one we take lightly," said Qwest
spokesman Bob Toevs. But, he said, the company is making the
decision in order to remain competitive.
He wouldn't say how much money the changes will save.
Qwest says it has 48,000 retirees. The Association of U S West
Retirees puts the number at between 50,000 and 60,000. The cost
increase will affect "a minority of them," Toevs said.
About a quarter of those retirees are eligible for Medicare,
Phelps estimates. In those cases, Qwest's health insurance
supplements Medicare, at a value of about $200 a month.
But Qwest provides primary health insurance for many retirees
under 65. And, like all other companies, Qwest's
health-insurance costs are rising faster than wages.
Phelps cited a retiree whose health insurance rose 63 percent
last year, from $165 to $269. Next year, the retiree will assume
the entire cost increase.
"We have a fair number of retirees that retired on small
pensions," Phelps said. "They are going to see this large
increase, and I'm afraid they are going to drop (health
insurance). And you know what? I think Qwest is counting on it."
Curtis Kennedy, an attorney for the retirees' association, said
many retirees are too old to buy life insurance now and called
the decision "despicable."
The association has pledged to examine legal options to contest
brandr@RockyMountainNews.com or 303-892-5269