A number of J.I. Case Co. retirees will soon see their company-paid health insurance benefits end following a Supreme Court decision made earlier this year.
In late June, a large segment of former J.I. Case Co. employees represented by the UAW received a letter informing them that the health insurance provided as part of their retiree benefits will expire Aug. 31. It was the culmination of more than two decades of high-stakes legal wrangling that affects retirees who left the company between July 1, 1994, and April 1, 2005, and surviving spouses of that same group.
Those retirees will be able to elect new coverage that will come with higher deductibles, but which CNH Industrial, the present incarnation of the company, says is “similar in many ways to current UAW retiree benefits and cost structure.” New coverage would begin on Sept. 1.
CNH Industrial also informed this group that:
- If the retirees elect new coverage via the company plan, they will pay monthly premiums for the plan as well as higher deductibles, coinsurance, and copays.
- Medicare-eligible participants must purchase Medicare Part D prescription drug coverage by Sept. 1 to have prescription drug coverage through the end of this year. The CNH Industrial medical plan for those who are Medicare eligible does not include prescription drug coverage.
- Those retirees must make an insurance election choice by July 20 or they will lose their coverage through CNH Industrial through the end of this year.
- Even if they choose the company-provided insurance, they will have to enroll again later in 2018 for coverage in 2019.
“Although the Supreme Court’s decision (Reese v CNH Global and CNH America LLC) would allow CNH Industrial to eliminate the benefits entirely, we decided instead at this time to modify the benefits and cost structure to bring them more in line with the benefits and cost structure of current UAW retirees,” wrote CNH spokesperson Meredith Davis following a request from Racine County Eye.
“The current plan enjoyed by the Reese group will end on August 31, 2018,” she explained. “A modified Plan takes effect September 1, 2018. Retirees must enroll in the modified plan if they want benefits coverage after August 31; there will not be automatic or ‘carryover’ enrollment from the old plan.”
She referred to those retirees, many of whom live in the Racine area, as the “Reese group.” They have been at the center of lawsuits regarding the loss of insurance benefits.
“Of course, we are deeply saddened by the decision,” wrote Darcie R. Brault, one of the attorneys representing the retirees in a March 6 letter. “We have been fighting this battle with the UAW’s financial, legal and moral support for over thirteen years. During the course of this litigation, we have been able to keep the benefits intact for you and thousands of other class members. The shift by the courts away from long-standing legal precedent is profoundly disappointing.”
Disagreement reaches back to 2004
Those benefits were part of a collective bargaining agreement from 1998 that provided a group benefit plan to certain employees that would retire under the pension plan.
The agreement did, however, contain a clause saying those benefits would end in May 2004. When it expired, a group of CNH Industrial retirees and surviving spouses filed a lawsuit seeking a judgment that their health care benefits would remain vested for life. The group generally was winning in court since the originally filing until the U.S. Supreme Court ruled against them in February of this year.
Retirees have been sent numerous mailings on the change in coverage, including worksheets that detail costs. Depending on when the retiree left the company, coverage costs are different.
The company has a phone number (800-561-0877) and an email address ([email protected]) for retirees who have questions. Representatives are available Monday through Friday, 8 a.m. to 5 p.m. Central time.
A bit of history
Case and its and brands have changed repeatedly in the past 30 years. Its corporate parent, Tenneco, bought International Harvester‘s agricultural equipment division and merged it into Case. The J. I. Case Company remained but began using the Case IH brand. In the 1990s it changed name a few more times before its merger into CNH Global ended its history as a distinct entity. Various CNH brands continue to make use of the Case name, such as Case IH.
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