A trust is available for some former steel workers and their beneficiaries that could make health coverage more affordable.
This funding could mean the difference between a solid quality of life or even living at all, said Dean Gloster, the San Francisco attorney who negotiated the voluntary employee beneficiary association trust.
Through the trust, retirees who worked in Ohio, Pennsylvania or Michigan are eligible for health-care benefits through the federal Health Coverage Tax Credit. The credit reimburses these retirees 72.5 percent of health-insurance and prescription-drug premiums.
The VEBA benefits are open to both union and salaried retirees, their spouses and dependents who are between age 55 and 65, worked for a steel company and had their pension trusted by Pension Benefit Guaranty Corp. “There are a lot of former steel workers who are in the same situation. They’re old enough where they have health problems, but they’re not old enough for Medicare,” Gloster said. “Steel workers worked hard jobs and tend to have more health problems than other people.”
The only way these VEBA programs work is to get information out to people and get them signed up for advanced credit payments from the Internal Revenue Service, he said. With advanced payment, the IRS sends a monthly check to the insurance company. Otherwise the retiree has to pay the insurance premiums and be reimbursed at the end of the year.
There are many companies that might have former workers who are eligible, Gloster said. Many of the nation’s steel companies turned over their retirement benefits in the 1990s.
These trusts first were introduced during the Delphi bankruptcy case in the mid-1990s, Gloster said.
There have been numerous challenges in getting information about these trusts to workers, he said.
“You would think it would be easier to give government money away to people who deserve it,” Gloster said.
The court order that created the trust was issued June 5 in U.S. Bankruptcy Court Southern District of New York.
The United Steelworkers union initially objected to the creation of the trust. The union also has released a statement about the new trust. “The USW is concerned that the introduction of this new VEBA and the efforts to sell the VEBA to retiree populations could create risks for some of our retirees,” according to the statement released by the union.
Many of the potentially eligible participants of this new VEBA are either already covered by a USW-negotiated agreement or are eligible for the health-coverage tax credit if they are between age 55 and 64, receive a pension from the Pension Benefit Guaranty Corp. and are not covered by Medicare, according to the USW.
“Quite simply, it could be risky for any retiree currently covered by a USW- negotiated VEBA to change coverage. Some 250,000 retirees are currently covered by USW-negotiated VEBAs that were established with the sole purpose of providing the highest quality of coverage at the most economical price,” according to the union.
Steel-industry retirees or their dependents interested in the recent VEBA trust can contact Cathy Cone from Cone Insurance at email@example.com, or by phone at 713-463-8575.