Thanks Obamacare? Warren Buffett Cuts Health Benefits By Over 57% At Heinz
Not satisfied with paying less taxes than his secretary, it seems Warren Buffett has decided that his employees should also pay more for their healthcare. His latest acquisition, Heinz, has recently announced a very significant cut in retiree health benefits. Of course, as the Pittsburgh Post-Gazette reports, Heinz is not admitting this is due to Obamacare but the company is not alone with 60% of employers considering changes through 2013. In an effort to cope with the uncertainty of ongoing health payments, companies have chosen (potentially smaller) lump-sum benefits, leaving the employee to fund the rest. As one reitree noted, "I feel that they should stand behind the moral obligation of the preceding owners of this company and maintain the program," but, keeping promises does not seem to be the norm these days.
Add Arnold Waldo of Carrick to the list of people disappointed with recent changes being made at the H.J. Heinz Co.
Mr. Waldo, 82, who retired from the Pittsburgh food company in 1985, received a letter in late November notifying him that Heinz was reducing its contribution to a retiree reimbursement account used to cover certain medical expenses, such as co-pays for doctor visits and health insurance premiums.
"Beginning in 2014, Heinz will contribute $1,093 per year, per household to your RRA," the letter dated Nov. 21 said.
The cut, not the first to the retiree benefit, takes the level that Heinz is contributing to the account down from $3,500 per year, Mr Waldo said.
The company confirmed that it has made changes recently, although it did not say how many people were affected.
"Heinz recently announced a reimbursement adjustment for a certain group of retirees in order to provide a more consistent contribution level across the vast majority of our Medicare-eligible retirees,"
In 2010, he said, Heinz stopped providing health insurance and created the retiree reimbursement account instead. The company started with a $7,000 contribution the first year to help with the transition and then moved to the $3,500 level.
Nor is Heinz the only company to reduce retiree health benefits. Research from Towers Watson/ISCEBS released two years ago found 60 percent of employers that offered retiree medical plans were considering changes for 2012 or 2013.
...the use of such programs has helped businesses avoid coping with swings in health insurance costs. Workers get a lump sum and then choose how to best spend it.
Waldo, who worked at the Heinz operation on the North Side for 28 years, notes, "I feel that they should stand behind the moral obligation of the preceding owners of this company and maintain the program."
- advertisements -