Oct 272012

AT&T retirees have been surprised, or even shocked, recently when the company sent information related to open enrollment for the retiree medical benefits.  Retirees under the age of 65, who are not eligible for Medicare, saw premium increases of hundreds of dollars a month for coverage under the standard PPO plan.  

Retiree health benefits are a permissive* subject of bargaining, and for the past two rounds of bargaining, the company has refused to negotiate with the union over the terms of the retiree health benefit package.

The reason for the cost shift is a result of the employer contribution cap kicking in. 

  • The fixed cap has the effect of limiting the employer’s contribution and any health cost increases above that level are shifted to retirees.
  • Retirees are required to pick up the amount of costs that exceed the cap.
  • In 2012 average per retiree costs exceeded the cap by 1.3%.
  • Costs grew by over 14% between 2012 and 2013, exceeding the cap by 14.4%. 

There is an alternative plan which does not have a premium, but it does have a higher deductible and higher out of pocket requirements than the PPO plan. 

The company refused to bargain with the union over the impact of the cost increases on retirees.  Nevertheless, the union was able to persuade the company to make some adjustments to the plan it had originally planned to impose on retirees.  As a result of union input, the company reduced premiums for retiree only coverage by about $37 per month; reduced deductibles in the alternative plan from $1000 individual/$2000 family to $500 individual/$1000 family; reduced the prescription drug deductible  in the alternative plan and the plan for Medicare retirees by $135. 

While the union was able to get the company to make some adjustments to the massive cost shifting it had planned, we all agreed it was not what we would have negotiated. 

Some in the company have told retirees that the reason for the extraordinary increases is the Affordable Care Act.  Nothing could be further than the truth.  In fact, there are only two provisions of the Affordable Care Act that would impact AT&T’s retiree health plan.  

  • First, improvements to Medicare, including full coverage of preventive care and recapturing overpayments to Medicare Advantage plans. 
  • Second, the Early Retiree Reinsurance Program, which set aside funds for employers who offer retiree health benefits, rebated $213.8 million to AT&T between 2011 and 2012 to offset the cost of claims from early retirees. 

Both these provisions will have the effect of easing the company’s cost burden.  The company has chosen not to share that cost relief with retirees

CWA believes the company should have done more for retirees.  That after a banner year, with healthy profits, and significant dividends for shareholders, the corporation could have done much more to assure that the former employees who built the company would have a quality, affordable health plan. 

We encourage retirees to express their views on the status of their health plans directly to AT&T CEO Randall Stephenson at the address below: 

Randall L. Stephenson
Chairman, Chief Executive Officer
AT&T Corporation
208 South Akard Street
Dallas, Texas 75202-4206

The link below gives you some indication of the kinds of changes the Affordable Care Act might allow, and how it could be spun by the employer.  When pressed, however, HR admits that it is, of course, a business decision. 


 *A “permissive” subject of bargaining means the union or the company may agree to discuss the matter, engage in full bargaining and reach agreement on the issue, or decline to talk about it at all. If either party declines to talk about the subject (in this case, retiree healthcare), that permissive subject then would be a dead issue. Either party may choose to keep it on the table, but they cannot force such an issue to impasse. Also, a strike over a permissive subject would be an unprotected activity, and if the company chose to fire those strikers, we could not get their jobs back. — Editor


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  52 Responses to “Why Are AT&T Retiree Medical Costs So High?”

  1. 14%??? Well that would be fine, however our monthly premium increased by an unbelievable (and barely manageable) 1241%, that’s twelve hundred forty one percent. NOT A TYPO. We are required to pay more PER MONTH in 2013 than our entire annual premium in 2012. Please explain that away.

  2. Very convenient that my comment would not post to facebook. You wouldn’t want the world to know how badly you are screwing your employees,

  3. Same here Karla, I thought they were billing me for a year at once!

  4. I had faith in the company to take care of their employees especially retirees like us. We dedicated our life as employees, loyal, worked hard and was proud to be a part of such rich and prestigious company. For many years I was grateful for having all the good benefits especially having a reliable health insurance. Now it seems like we, the retirees are being kicked on the face, being forgotten, it’s just because we are not with the company anymore, but I feel like we are being dumped in the gutter just because we are now retirees, we have to take the punishment for paying more premium every month. Most of us don’t even have enough pension to live by, what’s more when we have to pay so much for our health insurance. I feel very discouraged because I can not afford the premium of $81.92 a month. With this premium, I will not be able to put food on the table…..

  5. $81.92 per month? Mine went from $17 per month in 2012 to $272 per month in 2013. I can’t afford that. I went with the free (almost nothing covered) plan and if I get sick and have massive bills, which they would be if I had to go in the hospital, I will have to file bankrutpcty on them. Nothing else I can do.

  6. $81.92 per month? Mine went from $17 to $240.00 per month in 2013. that really took a big chunk out of my small retirement budget. I didn’t want to take a chance taking the free having bigger co-pays. i retired after 31 years with the company never in a million years after having our insurance paid all those years I worked that I would be faced to have to pay such a large amount for insurance on a smaller once a month income than when we payed nothing when working getting paid by weekly with overtime hours, What a slap in the face . That let you know how much they valued us as employees for all the hard work and labor we put in to help build this company, that is why you better put your trust in God and not in Man because he will forsake you.

  7. Premium about $29.00 to $290.00. Worked 36yrs for a great company and then they do this to us SHAME ON YOU!!! Then we also paid our union dues and walked the picket lines with CWA. What has CWA done for us? They want us to leave a comment SHAME ON YOU!!!

  8. since when had the union begged ????, is all BS from CWA, remember we do not pay dues any longer, do they care for us, of course not, no one does, we r better off joining a medicare advantage plan and advise all newer employees to resign from the union and tell them the truth, “you will be abandoned as soon as you retire and stop paying $$$$$, save the union dues $$$ now for retirement, you will need it.

  9. think its AT&T or do you think the increases could be related to that highly touted gem “Obama care?”

    • Just for the record a letter I posted on FB Randall admits it has nothing to do with the ACA–it was a AT&T business decision and the article also informs how hard CWA tried to get them to bargain for retirees as they always had and AT&T refused

  10. Everyone write to the CEO and blast him for how they are treating us. I started when Zane Barnes was CEO and he must be rolling in his grave on how we are being treated

  11. cwa was about the most worthless union going.

  12. Just got my new statement,,,how about 355 a month, this is outrageous and such an insult to those of us who sacrificed our bodies for this god forsaken company. I am so ashamed of ATT , I would never touch any product that they are involved with, how’s that for company loyalty after 30 years. ATT, CWA you both suck and should be ashamed…REALLYY!!!!

  13. As if an 1200+% increase in 2013 was not bad enough, they are adding another $150 a month for 2014. Our 14 year old son’s entire college fund plus clothes and food budget is now going to have to be used to pay for our health insurance. $434.95 per month compared to $23 per month is devastating :( It may not be illegal for ATT to treat retirees this way, but it is immoral and unethical and bordering on elder abuse. All states have laws concerning the abuse, neglect or EXPLOITATION of older people… Moreover, some states have laws giving victims of abuse, neglect or exploitation a civil cause of action. How many retirees are there in Michigan? I wonder what would happen if all the retirees made official complaints to both the BBB and to the Michigan Attorney General.

    • You’re retired and young enough to have a 14 year old? Sounds to me like you should thank AT&T for that benefit. Lol. You’re paying more because you’re using more medical services. That’s kinda how it works. :/

      • Oh yes, a 14 year old who has had 1 doctor visit this entire year and is on no medications is really using more medical services than a normal retiree. Retiree is 64 so what do you suggest? That we should have aborted him just because he was a surprise? It is people like him that are going to make a difference in this world, A+ honor roll and a leader in his church youth group and an amazing human being. Your comment was uncalled for and uninformed

        • Yeah, that’s a tough one. Mine was an insensitive comment, I admit. And I apologize. But my point is that as a union member myself (another one obviously), I’d kill for the benefits that you’ve received from AT&T. Just seems like you all seem a bit entitled. People work a lot harder for a lot less.

  14. As a retiree, I can’t help but wonder if we should start a campaign to cut the AT&T services we have, such as less channels for U-verse, or drop a land line, or switch to cheaper internet or cell service, Maybe AT&T would get the hint that we have to make up the difference by lowering our costs that we can control. It might hit them where it hurts the most (their profits). There are a lot of retired AT&T people, this would be a sustantial hit to their pockets!!

  15. From $67/mo in 2012, to $223 for 2013, then it will be $357 in 2014

  16. Same as Tina $67 in 2012 to $223, now $357 in 2014. That is shame that you give 33 yrs of dedicated service and retire with your benefits than you end up having to pay for insurance That really sucks not saying much for AT&T.

  17. The union is dead. The company has taken us for a health care ride

  18. I read a couple years back in the paper that big companies had some tax break or credits taken away for giving employees healthcare. The article said that it was going to cost AT&T 1 BILLION dollars. It went on to say how companies were going to start deciding on whether to continue giving healthcare or pay the fine per employee….something like 2,000. per person. Once again….it had the AT&T symbol in the background.

  19. I saw on TV recently Obama talking to a group while campaigning. He was saying how he wants universal healthcare. I’ve heard him say that several times. He also went on to say that the people wouldn’t go for it immediately and it could take 10, 15 or 20 years before companies would stop offering healthcare.

  20. Mine went from $20 a month to $160, 800%! My loyalty to A.T.&T. products and services will end, if they don’t have any loyalty to me with 33yrs service, why should I show them any loyalty. That won’t mitigate the lost pension money, but at least my money won’t be going into their bloated coffers. BOYCOTT A.T.&T.

  21. I do not beleive one freaking word the Union has to say. They wanted us to Dem. and we now have gotten screwed. it was and is the Obamacare. that changed things. VOTE REP. TO GET CONTROL OF BOTH HOUSES. it’s to late for us but we might could help the younger ones.

  22. Are you out of your mind? Voting republican is like giving your vote to the tea party extremists. They have nearly destroyed this country. Do you believe the company and their string of lies, what a sucker!!!\

  23. “The company refused to bargain with the union over the impact of the cost increases on retirees.” Does the union only bargain for benefits the company allows them to?

    Terry said, “The union is dead. The company has taken us for a health care ride”


    • I hope you have read most of these posts and you will see that the Supreme Court said that Companies do not have to bargain for retiree benefits–they always have–but the last 2 contracts that have refused and the union could do nothing

  24. Its NOT up to the company to REFUSE to negotiate.. It’s up to the union to fight for us!. Obamacare has done Nothing to address the costs of healthcare, NOTHING!. No tort reform, no increased competition by allowing companies to sell everywhere. This UNION used to be good. But today they are NOTHING but another wing of the democratic party like the education system and the media. They are USELESS and just take our money to support the Radical lefts agenda, and this Obama care let’s face it is socialism.. We are doing what Mr. Obama wants us to do, Share the wealth!.. so here we are. Thanks Union you worthless organization. There was a time when the union would Strike or use the Electronic Picket Line… Not now tho… So us who worked and sacrificed family time for over 30 years not to mention supporting the Leaches of the Union, bend over and grab the ankles and enjoy it.

    • This huge cost increase has nothing to do with “Obama Care”! It has to do with corporate greed, corporations that are propped by reactionary Republican legislators and judges, who in turn are bought and paid for by corporations and blood suckers like the Koch brothers and their running dogs the tea party and supported by the right wing demagoguery of groups like Fox News and moronic individuals like Sarah Palin and Michelle Bachmann and their gullible followers.

      • It has EVERYTHING to do With Obamacare! Why should men be forced to buy maternity insurance, or childless people be force to buy dental care for those under 6?. It is called ‘sharing the wealth”.. The Koch bothers? are you kidding?. What do they have to do with this mess. Keep voting for the RADICAL LEFT and we will all end up like Detroit! Bankrupt!., Or San Bernardino, etc… Palin’s Alaska does not need a buyout and they are in the Black. Palin was a mayor and a Governor … Obama is a communist organizer!. Boy we sure could have used Palin..Fox news Rocks.. I suppose you watch MSLSD all day with their HATRED! Garrett… Quite drinking the cool aid..

  25. Reply to Todd: I don’t know about the place you worked at, but I can assure you that AT&T makes billions of dollars of more profit annually. Our benefits came as a direct result of our workers and our unions and the sacrifices we endured (especially the strikes) when all we wanted was just a small piece of the magnificent pie that greedy upper management devoured for themselves. Think!

  26. Read all the previous comments, during the last contract negotiations, the company would not discuss retiree health care costs. This item is a “permissive” item which means the company doesn’t have to discuss items so designated, and they decided that since there was nothing we could do about it, they would go ahead and stick it to us…

    • Sorry Mr. Garrett but I used to be a Democrat. Before they became anti family, anti God, Pro Abortion, High Taxers, Liars, Thieves who don’t pay their taxes, anti 2nd amendment, anti Death Penalty ,anti military and such a divisive group who name calls, divides voters into this voting block this and that voting block instead of treating all as Americans. I can see the mess they put Detroit and and California in. Tax the hell out of people and they are still in massive debt. They are Pro Illegal to create another voting block. I don’t know what you have against Fox news but it is the ONLY news network that does not name call, or divide people. They are Accurate and Fair. Just watched NBC And CBS today about the Duck Dynasty Guys comments. They called it HATE SPEECH. Excuse me, he was quoting the Bible. So they are calling the Bible HATE SPEECH?… You know where they can go. If liberalism were so great just look at the Katrina victims. Desperately waiting for Government Help. Then Look at the Heartland where Tornadoes devastated the towns. The people there were NOT waiting for the Government and got to doing what needed to be done. Liberalism? No thanks..

  27. It’s all about money and survivability. The company and the union both put these first and foremost!

    Thank God that He hears our prayers and answers them! Prayer works!

  28. r. Garrett; ….You probably shouldn’t let yourself be trolled by Danny Bolduc; It is more than apparent that he prefers to engage others in a Political Agenda…And make points to that end…
    Not really sure if he has ever worked for AT&T or Ma Bell..??
    Doesn’t really matter, don’t think he read the whole Article or is capable of understanding it anyway.
    Engaging, the political side views and opinions, expresses, his lack of intelligence.

    As explained above, this issue or part of the Bargaining was considered a “Permissive issue” or part of Bargaining/Contract, etc….
    Meaning that either side (Company or Union) could discuss or choose to discuss and act/not act upon.
    The Company AT&T chose not to discuss or act upon, the issue.
    This displays a Fact of Corporate greed and the Union (CWA and et al) hands were tied..

    After many of us working 30+ years for AT&T-Bell Systems…We are being turned out into the cold, compared to some of the promises that were expressed or expected…

    As a retiree and wife, we faced a 350% increase in cost to us for insurance through AT&T’s provider.
    Couple that with Medicare being paid by a couple about 70 years old…
    And our insurance bill per year is roughly about $4700.00
    It is not what we expected in our later years
    Terry….Yes Garrett, it may be who you think it is..?

    • Ps….It does seem that AT&T, the Company is getting a “kick back” from the Government, but alas is making a Corporate decision, to not adjust the Health insurance cost for Retirees, Workers or both whichever the case may be..??
      ie; Early Retirees Reinsurance Program (ERRP) rebated to the Tune of $214 Million in 2011-2012.
      Thanks AT&T..

    • Terry lc. I really don’t appreciate you calling me names. I have more service than you do. I was a member of cwa for 34 years,. The idea of the electronic picket line was my idea. So much for you calling me having lack of intelligence. It shows how much you don’t know. Now, my comment has to do with the unions total lack of bargaining. The cwa failed to even use the electronic picket line. The contract before this last one was a joke when it came to our 2 day strike. So next time you make uninformed comments and making yourself look totally inpept, you may want to do some questioning or research before writing.

      • Danny Boy….I mentioned your shortcomings, because you do not seem to understand simple English….Who cares if you worked at AT&T for 34 years; “NOT PART” of the discussion, as you seem to deflect from, what the Article is TRULY ABOUT.

        YOUR WORDS…”in quotes”
        “voting demonrat is like voting for Socialism, Communism and devisiveness…kill those babies big boy.”…WHAT THE HELL IS THE MATTER WITH YOU ??

        ” It’s NOT up to the Company to negotiate, it’s up to the Union to fight for us…”
        DID YOU, really read the Article? It’s a “permissive issue” in the Contractual language or Bargaining process….The Company DID refuse, and the Union can do NOTHING about it.

        “It has EVERYTHING to do with Obamacare”
        Once again showing your lack of comprehension skills, DON’T BELIEVE this was ever mentioned in the Article….And I’m supposing YOU MEAN the AHC Act….??

        “Thanks UNION for constantly supporting the RADICAL LEFTISTS with our dues.”
        Are you on any Medications or temporarily out ?? See your Doctor immediately..

        I’m not even going to go into, your “Democrat Rant” not worth my time.
        Don’t believe my “comments are uninformed” I read the piece, apparently YOU DIDN’T.
        Also believe “my research is solid.”
        I figure you are a “bitter old man” or a 20 year old kid living in his Mom’s basement.
        The 34 years you “may have worked”, that’s a surprise, how did you ever pass the test??
        As far as the name calling, sorry but NOW, I believe you are a total MORON…
        Good luck trolling, because like maybe others, I really have nothing left to say to you.

        • Apparently you say I am a troll.. Then you say to “ignore the troll”. Well, maybe you should take your own advice. Do you always answer what you think are Trolls and then tell others to ignore them?. Obama care is a dismal failure. As far as the Union goes they ALWAYS SUPPORT DEMOCRATS… Always. You live in California?. Keep drinking the cool-aid Pal. You claimed, “not really sure if he works for At&T.” So again, you made a claim that you had no knowledge of. Who cares if you worked over 34 years?… well, I do since my pension is more than yours. What I am saying is the Union is a bunch of Political democrap phoneys who take our money, don’t do anything for us and go to Hawaii for their meeting on our dime. Stop drinking the KOOL AID…… and get back on your meds sport.

  29. I see no point in continuing this discussion, it has degenerated into the usual partisan crap, and I wont argue with fanatic ideologues…

    • I agree 100%, guess I should have mentioned I retired in ’99 with over 30 years of service.
      I didn’t have 34 like the other guy and you, but it was enough to get out of the rat race…
      Fortunate enough to retire and never look back…
      But I have heard and somewhat believe, that AT&T today…Is not exactly like AT&T and the Bell System operating Companies I grew up and had a career with.
      And a failure by the Company to discuss or want to discuss Retiree Healthcare is somewhat proof of that. IMO.

      • There once was a time when the Union had Clout. They would fight for us as an entity and fight for us individually. Those days are gone.

  30. This is a quote from the Friday Bulletin generated by the Alliance for retired Americans:

    Tell AT&T Corporation to Respect Retirees
    AT&T retirees were surprised when the company recently sent information related to open enrollment for the retiree medical benefits. Retirees under the age of 65, who are not eligible for Medicare, saw premium increases of hundreds of dollars a month for coverage under the standard PPO plan. Retirees on Medicare saw a jump in premiums of about 500% for supplemental insurance. CWA and the Alliance believe that the company should have done more for retirees, as AT&T enjoys healthy profits and significant dividends for shareholders. “Corporate executives should do more to assure that former employees who built the company have quality, affordable health care, and don’t flounder in unilateral, drastic and unprecedented increases,” said Richard Fiesta, Executive Director of the Alliance.

    Some in the company told retirees that the reason for the extraordinary increases is the Affordable Care Act. Nothing could be further than the truth. In fact, there are two provisions of the Affordable Care Act that would impact AT&T’s retiree health plan. First, it improves Medicare by including full coverage of preventive care and recapturing overpayments to Medicare Advantage plans. Second, the Early Retiree Reinsurance Program set aside funds for employers who offer retiree health benefits, rebating $213.8 million to AT&T between 2011 and 2012 to offset the cost of claims from early retirees. Both these provisions eased the company’s cost burden, but AT&T has chosen not to share that cost relief with retirees.

    In 2012, AT&T’s CEO Randall Stephenson earned $22.23 million, 642 times the average worker’s pay ($34,645). Please take action and tell him that passing down increases to the tune of 500% in monthly premiums for supplemental health care is uncalled for. Send him an email by using this link: [http://bit.ly/1cKhZ3m] or send him a letter: Randall L. Stephenson / Chairman, Chief Executive Officer / AT&T Corporation / 208 South Akard Street / Dallas, Texas 75202-4206.

  31. I have to pay dearly so I have to get my money’s worth. A couple of years ago I fell down the stairs and had a stroke. Still alive but can’t work because of memory problems. Saw my insurance increase again. Once again I fell down the stairs. This time I broke my left knee and fractured my wrist. But this time I covered my head so I didn’t get a broken blood vessel. Like I said earlier…AT&T is sticking it to me so I WILL get my money’s worth. I am just waiting for this fine organization to cut off my psychiatric bills.

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