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Can an Employer Cut Retiree Health Benefits?
- May 13th, 2008
Some fortunate employees belong to employer-provided health care plans that carry over to retirement. But how secure are those benefits after retirement? Under what circumstances may the company reduce or terminate them?
In fact, nothing in federal law prevents employers who offer retiree health benefits from cutting or eliminating them -- unless they have made a specific promise to maintain the benefits.
The key to understanding your particular rights lies in the Summary Plan Description (SPD), which employers are required to provide within 90 days after you become a participant in the plan, or other plan documents. If your employer has reserved the right in the SPD and controlling plan document to change the terms of the plan, you may lose coverage at any time during your retirement. If your employer made a clear promise that you will have specific health care benefits for a definite period of time or for life, and did not reserve the right to change the plan, you should be covered.
But benefit plan documents are often difficult to interpret. To help employees or retirees evaluate their plan documents, the U.S. Department of Labor has prepared a brief that explains, among other things, what to look for in such documents, the implications of conflicting or ambiguous language, and special cautions for early retirees.
To read the Department's advice, go to: http://www.dol.gov/ebsa/publications/retiree_health_benefits.html
Local Elder Law Attorneys in Ashburn, VA
Felinton Elder Law & Estate Planning Centers
Mindy Felinton concentrates in the areas of Medicaid planning, Veterans' Benefits, asset protection, nursing home planning, elder law, wills, estate planning, trusts, living wills, powers of attorney, probate administration and trust administration and began her legal career 30 years ago as an Assistant State Attorney...
Needham Mitnick & Pollack, PLC
Judith Mtinick is well known for acting as a guardian, conservator, trustee or agent on behalf of clients or by court appointment. This experience gives her a wide perspective and extensive practical knowledge that she uses when advising clients in drafting their planning documents. Her experience, as a court appointed...
Hammond and Associates, LLC, Elder Law, Estate Planning, Wills, Trusts, Probate
For Jeffrey Hammond, the practice of Elder Law is personal. Jeff’s many years of experience in law and in business did not prepare him for the crisis he faced in 2005 and 2006 when his father suffered a stroke and both of his parents suffered from dementia and other medical problems. At that time, Jeff began an i...