In Brief

U.S. Department of Labor Employee Benets Security Administration

Can the Retiree Health Benets

Provided By Your Employer Be Cut?

Background

Providing for health care is an

important part of retirement. Some

employees are fortunate: they belong

to employer-provided health care

reduce or terminate my health

benefits?

Employees and retirees should

know that private-sector employers

are not required to promise retiree

health benefits. Furthermore, when

employers do offer retiree health

benefits, nothing in federal law

prevents them from cutting or

eliminating those benefits--unless

they have made a specific promise

to maintain the benefits.

The key to understanding your

retiree health benefits lies in the

documents governing your plan.

(SPD) is a summary of the terms of

the plan. Employers are required to

provide a copy to you within 90 days

after you become a participant in the

plan.

For retirees, the SPD that was in

effect when you retired may be the

controlling document. Y

ou should

save a copy of it. You also should

agreement or an insurance contract.

You Should Know - Coverage Can Change

If your employer has reserved the

right in the SPD or 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 specic health

care benets for a denite period of

time or for life, and did not reserve

the right to change the plan in any

formal written plan document, you

should be covered.

documents promise that health

benets after retirement will

continue at a specied level for a

certain period of time?

If there is no specic language

describing retiree health benets in

your plan documents, it is unlikely

that you have guaranteed coverage.

If there is such language, how

specic is it?

“Basic health care coverage will be

provided at the company’s expense

for your lifetime.”

made, is there also language that

gives your former employer the

right to change or terminate that

specic promise or to amend or

terminate the entire plan?

Typical language giving the

employer that right might read:

“The company reserves the right to

modify, revoke,suspend, terminate or

change the program, in whole or in

remember that it can change in the

future.

The documents in eect

when you retire may be the ones that

will determine your health benets,

if any, in your retirement. However,

court rulings in these matters have

not been uniform.

What if the Language is Conicting or Ambiguous?

Benet plan documents are often not

Some courts may not enforce

On the other hand some courts have

You should obtain whatever

information is available indicating

the intentions of your former

employer with respect to retiree

health care benets.

Has your employer sent any

correspondence--letters,

brochures, medical plan

booklets, employee handbooks

or other written materials--

containing promises concerning

the duration of retiree health

benets?

Are there records of meetings

promises?

You should know that some courts

may take into account any informal

communications that you have had

with your employer concerning

retiree health care benets, at least

where the plan document and SPD

are ambiguous.

carefully consider the materials you

have received concerning the terms

of your early retirement.

Do any of these documents

contain language regarding the

duration of your retiree health

benets?

Are there any records of

meetings that your employer

may have had with you

benet promises made with respect

to early retirement oers because

the formal plan document, collective

contained language allowing the

employer to terminate or amend the

plan.

retirement, you may wish to protect

yourself by negotiating a written

contract with your employer that

Given the uncertainty of the law

in this area, you may wish to seek

arrangements with your employer.

understand the terms governing

your health benets after retirement.

If you have a question or dispute

about your individual retirement

benets or about the possibility of

employees or retirees, you should

consult your union representative

or an attorney who is familiar with

employee benets.

or enforce retirement health care

promises.

For More Information

As an employee or retiree, you are

entitled to a copy of your SPD.

You can request a copy from your

employer and receive it within 30