It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
June 08--Up to 45,000 steel-industry retirees whose health insurance benefits were shredded by their bankrupt former employers will have access to deeply discounted coverage, starting July 1.
Retirees ages 55 through 64 and their dependents in Pennsylvania, Ohio and Michigan are eligible for federally subsidized benefits worth tens of millions of dollars -- and potentially as much as about $5 billion, experts said on Thursday.
A federal bankruptcy judge in New York this week authorized creation of the Steel Retiree VEBA (Voluntary Employee Beneficiary Association) Trust, based on Bethlehem Steel Corp.'s bankruptcy filing 10 years ago.
Under the trust, retirees pay 27.5 percent of their medical, prescription-drug, dental and vision benefits cost. The federal government pays the other 72.5 percent.
Eligible retirees are not restricted to former Bethlehem Steel workers and dependents. The group includes retirees from more than 50 bankrupt steel companies, including Edgewater Steel, Republic Steel, LTV, Wheeling-Pittsburgh Steel and others.
A key qualifier is that the steel company must have had its pension terminated and turned over to the Pension Benefit Guaranty Corp.
"Anyone who worked for those companies can participate," said Gary Kaplan, a bankruptcy attorney at Farella Braun + Martel LLP, the San Francisco law firm representing the trust in the Bethlehem Steel bankruptcy case.
"The real purpose of the VEBA is to provide coverage while retirees are in the pre-Medicare period of age 55 to 64," said Kaplan. "They are the ones who fall between the cracks: They are not old enough for Medicare and can hardly afford health-care coverage -- if they can get it at all."
Once retiree reach 65, Medicare takes over their coverage, but their dependents remain covered under the VEBA trust for another two years, said Kaplan.
The federal subsidy stems from health-coverage tax credits made available through the American Recovery and Reinvestment Act, the economic stimulus law passed in 2009.
The law allowed a similar VEBA to be established for retirees of bankrupt auto-parts companies, said Cathy Cone, managing partner of Cone Insurance Group -- the Houston-based broker acting as the human-resources liaison between steel-company beneficiaries and Marsh & McLennan Cos., the plan administrator.
"We're reaching out to the newspapers to reach as many people as we can to find out about this," said Cone. "This (steel VEBA) even gives you choices and coverage options, depending on your needs."
Aetna Inc. provides the health and drug coverage. Metropolitan Life Insurance Co. provides the dental coverage. And VSP Vision Care Inc. provides vision coverage.
Officials at the United Steelworkers either declined to comment or could not be reached.
For more information about the health coverage, visit www.conebenefits.com/steel or call 855-407-8335.
In addition, experts involved in the coverage will conduct road shows in Western Pennsylvania in late June. Each day has two sessions -- 9 a.m. to noon, and 1 p.m. to 4 p.m. Here is the schedule:
--Pittsburgh, June 25: Sheraton Station Square, 300 W. Station Square Drive
--Greensburg, June 26: Ramada Inn, 100 Sheraton Drive
--Johnstown, June 27; Holiday Inn, 250 Market St.
--Mars, June 28: Four Points by Sheraton/Pittsburgh North, 910 Sheraton Drive
--Pittsburgh, June 29: Sheraton Station Square, 300 W. Station Square Drive
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