Maytag retirees receive letters on benefit plans

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Maytag union retirees received a letter earlier this week from Whirlpool outlining the basics of Whirlpool’s plan to change their health care coverage. Whirlpool has filed a lawsuit in Des Moines federal court seeking to reduce health benefits for Maytag union retirees to the same level as Whirlpool retirees. The letter, dated Aug. 1 and signed by Amana Division Vice President Dan Smith, read in part: “The medical insurance plan in which you have been enrolled has been provided pursuant to the 2004 Insurance Agreement between Maytag Company and the UAW and its Local #997. According to its terms, the Insurance Agreement became effective as of July 5, 2004 and remained in effect until 12:01 a.m., July 31, 2008. Recently completed negotiations with the UAW and its Local #997 produced a new labor agreement which does not include the obligation to maintain the previous medical plan for retirees. Therefore, Whirlpool no longer has a contractual obligation to continue to the plan and is at liberty to revise or terminate your previous medical plan at its discretion. “I am pleased to advise you that Whirlpool has chosen to continue to provide the option of medical insurance to you and other qualifying Newton hourly retirees ...” The letter further notes that the current plan will remain the same for the rest of 2008. Beginning Jan. 1, the existing plan will cease and retirees will have the option of joining one of two Whirlpool retiree plans. Those plans appear to require significant contributions from retirees for participation. The first plan supports retirees’ medical expenses at roughly an 80/20 split of costs. The contributions for 2008 were $1,726 for pre-Medicare participants and $1,662 for Medicare-eligible participants. The 80/20 plan has an annual deductible of $500 per person and would pay 80 percent of medical expenses (after the deductible) up to a co-insurance maximum of $3,500. Above that $3,500, the plan would pay for 100 percent of expenses with a lifetime maximum of $1 million. The second plan, a 70/30 split, required a $994 contribution in 2008 for pre-Medicare persons and $912 from Medicare-eligible participants. The annual deductible is $1,500 per person and the plan pays for 70 percent of medical expenses (after the deductible) up to a co-insurance maximum of $12,000. Above that $12,000, the plan would pay for 100 percent with a lifetime maximum of $500,000. The rate sheet also notes that prescription drugs would be subject to medical Deductible and coinsurance plans for pre-Medicare individuals and would provide $35 a month for Medicare D participants. Retirees and dependents eligible for Medicare must enroll for full coverage under the plan. “The Whirlpool plans assume that Medicare eligible retirees and dependents will receive payment from Medicare and reduce their payments accordingly even if not enrolled in Medicare,” it states. The letter also states that more details about the program in the October and November time frame. “While Whirlpool reserves the right to make future changes to the plans and even terminate them, we are pleased to be able to offer you the opportunity to participate in the same medical plans as other Whirlpool retirees,” it states. Retiree Stanley Rooda was surprised when he received the letter. He said he had believed that his health coverage through Maytag would remain the same through the rest of his life. “This really came as a total shock,” he said. “I think they’re doing this underhandedly” Maytag retiree Max Tipton indicated this morning that to his knowledge the UAW still intended to fight Whirlpool’s attempt to reduce benefits. “We’re firmly convinced,” he said, “that they don’t have a right to do what they’re doing with this insurance.”

Andy Karr can be contacted at 792-3121 ext. 434 or via e-mail at akarr@newtondailynews.com.