Judges rule against GE retirees in health benefits case
Judges say company was within its rights to make changes
Another attempt to restore health benefits to General Electric retirees has been defeated.
A panel of judges last week ruled in favor of GE, which has been fending off a legal backlash since 2015, when the company canceled health care benefits for retirees over 65. Following a Thursday hearing within the U.S. Court of Appeals for the Sixth Circuit, the judges echoed GE’s position that the company did not violate federal benefits and labor laws with its decision.
The issue dates to GE’s 2015 move to cut supplemental health care plans for retired salaried workers, instead offering access to a private exchange of insurance providers and a $1,000 annual reimbursement to cover expenses. A similar decision followed shortly after for retired hourly workers.
The decision was similar to moves taken by other large companies that have opted to change benefit offerings to cut rising health care costs, especially among retirees.
The initial changes saved GE nearly $1.4 billion in future benefit obligations and affected about 65,000 people, including thousands in southwestern Connecticut, where the company had been headquartered until its depar- ture for Boston in 2016. The suit involving hourly workers affected about 50,000 people.
Retirees and a coalition of unions have contested the company’s decision in a series of suits, arguing the company improperly reneged on medical coverage promises it had made to former workers.
The ruling last week was the latest in which a series of judges has maintained that GE’s collective bargaining agreement with the union did not guarantee health benefits in perpetuity.
The company has consistently maintained that its decisions were in accordance with accepted practices. “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,” the company said in state- ment when the first suits were filed.
The unions contested that belief. “We are outraged that a very profitable General Electric Corp. would choose to break promises to its retirees during the most vulnerable time of their lives, after they gave decades of service to this company,” read a 2015 statement by the chair of the coalition of unions that represented workers. “I am glad these retirees have unions that are willing to step up and fight for justice.”