Q. I retired last year from a large auto dealership. I thought I was set for life with my retirement benefits. Now I'm hearing that they are considering cutting the retirement health benefits. Can my (former) boss really do that?
A. Maybe. Employees and retirees should know that private-sector employers are not required to promise retiree health benefits. Furthermore, when employers do offer retiree health benefits, nothing in federal law prevents them from cutting or eliminating those benefits--unless they have made a specific promise to maintain the benefits, according to the US Department of Labor. The key to understanding your retiree health benefits lies in the documents governing your plan. Check out the Summary Plan Description (SPD).
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.
But, 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, according to the DOL. Find out more information here.
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