Another failure of employer-based health insurance

If you were negotiating an employment agreement, you might consider taking an outstanding benefits package in exchange for a lower starting salary or a wage freeze. How would you feel if many years later, in retirement, some of those benefits were taken away from you?

About 3,000 former Maytag workers and family members have received letters from Whirlpool this week informing them that they are about to get cheated. Here’s the background:

Whirlpool Corp. has filed a lawsuit in federal court seeking to cut the medical benefits of thousands of retired Maytag workers.

The lawsuit, dated July 24 and filed in U.S. District Court for the Southern District of Iowa in Des Moines as a class action complaint, names the international and local chapters of the United Auto Workers union and three retired Maytag workers as representatives of the class. […]

Whirlpool bought rival Maytag in 2006 for $1.7 billion and assumed the negotiated union contracts and related benefit plans. […]

Whirlpool said in the lawsuit that a contract negotiated between the union and Maytag in 2004 expires on July 31. Whirlpool said it plans to change the retiree medical benefits on Jan. 1, 2009, to bring the benefits in line with the same plan that more than 10,000 current employees, retirees and their dependents have.

I hope that Whirlpool’s lawsuit will fail, but unfortunately, the federal bench is so full of Republican-appointed judges that I don’t expect much in the way of protection for union members.

Barack Obama released this statement today in connection with the controversy:

Des Moines, Iowa – Below is a statement from Senator Barack Obama on the letter Whirlpool sent to Maytag union retirees this week about changes in their health benefits.

“In America, we believe that if you work hard, you should be able to build a better life for yourself and your family.  But today, this American dream is slipping out of reach for too many working Americans. Whirlpool’s decision to cut the health care benefits of 2,200 Maytag retirees is the latest sign that we need to change the broken system in Washington.  

“It’s not right that Maytag’s CEO walked away with a multi-million dollar buyout while the hardworking men and women who built the company lost their jobs and are now facing health care cuts. I’ve had the privilege of meeting with Maytag workers in Newton, and I know they negotiated those benefits in good faith, giving up pay increases and other benefits.  Now it is time for Whirlpool to show good faith to their former employees.  

“As President, I will fight for our workers every day because when our workers do well, America does well.  In the Senate, I’ve fought to protect pensions, and I will continue that fight in the White House.  I will make sure our workers get the fair wages, affordable health care, and secure retirement that they deserve.  And I’ll change our tax code so it rewards companies that create jobs here in the United States instead of companies that ship jobs overseas. I’ll be a President who looks out for Main Street, not just Wall Street and who fights to put the American Dream within reach for every American.”

I certainly hope Obama will work to strengthen labor unions and workers’ rights in this country if he gets elected.

But ultimately, Whirlpool’s action is yet another indictment of our health care system. Even Americans who have good employer-based health insurance can get screwed.

To get more informed about the failures of our current health care system and the benefits of moving to a single-payer “Medicare for all” model, read nyceve’s diaries at Daily Kos or the Guaranteed Healthcare group blog.

At Guaranteed Healthcare, you can also find a list of Democratic candidates for Congress who have endorsed HR 676, which would establish a single-payer health care system.

  • From the perspective of a small employer

    Our company has about 20-25 people.

    We struggle to offer what we can for health care, but still fail to compete with other companies who are bigger and in a much better purchasing pool for medical insurance.

    That is why I really wanted a president who would focus on a health-care system that either removes the responsibility entirely from emoloyers, or makes it easier for companies of our size to provide what we can (or even allow us to provide a little more).

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