Some fortunate employees belong to employer-provided health care plans that carry over to retirement. But how secure are those benefits after retirement? Under what circumstances may the company reduce or terminate them?
In fact, nothing in federal law prevents employers who offer retiree health benefits from cutting or eliminating them -- unless they have made a specific promise to maintain the benefits.
The key to understanding your particular rights lies in the Summary Plan Description (SPD), which employers are required to provide within 90 days after you become a participant in the plan, or other plan documents. If your employer has reserved the right in the SPD and controlling plan document to change the terms of the plan, you may lose coverage at any time during your retirement. If your employer made a clear promise that you will have specific health care benefits for a definite period of time or for life, and did not reserve the right to change the plan, you should be covered.
But benefit plan documents are often difficult to interpret. To help employees or retirees evaluate their plan documents, the U.S. Department of Labor has prepared a brief that explains, among other things, what to look for in such documents, the implications of conflicting or ambiguous language, and special cautions for early retirees.