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What to Look for in Plan Documents
Check all your plan documents with
the following questions in mind:
Do the SPD or other plan
documents promise that health
benets after retirement will
continue at a specied level for a
certain period of time?
If there is no specic language
describing retiree health benets in
your plan documents, it is unlikely
that you have guaranteed coverage.
If there is such language, how
specic is it?
Sometimes language covering retiree
health benets is included in the
documents, but it is too vague to
stand up to a test in the courts.
Conversely, there is language on
employee health benets that has
held up in court. Here is an example:
“Basic health care coverage will be
provided at the company’s expense
for your lifetime.”
Even if a specic promise is
made, is there also language that
gives your former employer the
right to change or terminate that
specic promise or to amend or
terminate the entire plan?
Typical language giving the
employer that right might read:
“The company reserves the right to
modify, revoke,suspend, terminate or
change the program, in whole or in
part, at any time.”
This is an actual example, but other
similar language may be found
anywhere in the plan documents.
If you are an employee reviewing
the current plan, it is important to
remember that it can change in the
future.
The documents in eect
when you retire may be the ones that
will determine your health benets,
if any, in your retirement. However,
court rulings in these matters have
not been uniform.
What if the Language is Conicting or Ambiguous?
Benet plan documents are often not
easy to interpret, and the language,
described above, providing an
employer’s right to change benets
may be contained in any part of the
documents.
Some courts may not enforce
what seems like clear “promise”
language if the plan document
contains general language reserving
the employer’s right to amend or
terminate the plan.
On the other hand some courts have
enforced clear promise language
in an SPD, even in cases where the
plan document contained a right by
the employer to amend the promise.
You need to check all documents.
Review Any Employer Communications on Retiree Health Benets
You should obtain whatever
information is available indicating
the intentions of your former
employer with respect to retiree
health care benets.
Has your employer sent any
correspondence--letters,
brochures, medical plan
booklets, employee handbooks
or other written materials--
containing promises concerning
the duration of retiree health
benets?
Are there records of meetings
where your employer made such
promises?
You should know that some courts
may take into account any informal
communications that you have had
with your employer concerning
retiree health care benets, at least
where the plan document and SPD
are ambiguous.