Honeywell delays cutting health benefits for retirees

South Bend Tribune (IN)

May 17--SOUTH BEND -- Honeywell retirees will not lose their health benefits after all -- at least not yet.

The aerospace company, with a longtime plant on the city's west side, has tabled a plan to eliminate medical and prescription drug coverage for 4,700 United Automobile Worker retirees beginning July 1.

"They're not going to terminate insurance at this time," Tom Zmyslo, retiree representative for UAW Local 9, said Tuesday. "But they reserve the right to do it in the future."

The company notified retirees of the move in April, saying the Medicare supplemental insurance market had matured, "providing eligible individuals access to affordable and comprehensive health insurance and prescription drug coverage."

Retirees negotiated the benefits during their years of employment with the company and had assumed they were for life.

And that's what Donna Hall, 70, a widow whose husband worked at Honeywell, is holding the company to. "We know what we were told when we left -- when our spouses left -- that we would have insurance until we were dead," she said. "And I'm still going. I'm still alive."

So Hall was overjoyed by the news that the company plans to continue, at least for now, the insurance and prescription drug coverage. She acknowledged though, she's worried that it could ultimately be taken away.

The UAW filed a motion for temporary injunction in U.S. District Court last week, arguing retirees would suffer "irreparable harm" if the company were allowed to eliminate coverage altogether.

Lawyers for the union argued the applicable agreements governing retiree health care, negotiated by the retirees in 2003, 2007 and 2011, promised post-expiration coverage at not "less than" $4,207 to $20,531 annually depending on Medicare eligibility and coverage.

They also pointed to language in the agreements that they said showed Honeywell viewed the benefits as "vested," or guaranteed, as well as Honeywell's decision to continue paying the benefits even after the most recent agreement expired.

A hearing on the motion had been set for June 27.

Zmyslo said the company has now agreed to await the outcome of several unrelated court cases dealing with the same issue.

Retirees will officially be informed of the decision by letter in the coming days, he said.

"In light of recent activity in retiree medical cases not involving Honeywell, the Company has decided to delay the termination of its sponsored medical and prescription drug coverage for certain retirees," Honeywell said in a statement Tuesday. "Once those cases are resolved, Honeywell will reevaluate the situation and notify retirees of any changes to their coverage.

The company said it would "provide ample time for retirees to carefully review their available coverage options at that time."

Announced by letter in late April, the decision to eliminate benefits caught retirees off guard and stoked anger at Honeywell, which manufactures parts for the aerospace industry in South Bend.

Zmyslo described Tuesday's delay as "a great relief."

"We've got so many people who have cancer and heart surgeries and operations coming up here shortly," he said, "and were just scared to death about what to do."

Tribune reporter Howard Dukes contributed to this story.

eblasko@sbtinfo.com

574-235-6187

@ErinBlasko

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