Benefits July 18, 2003

National Steel Severs Retiree Health Premium Payments

July 18, 2003 (PLANSPONSOR.com) - Retirees of National Steel Corp. are now faced with a termination of their health care and life insurance benefits, after the company announced it will cease payments of the plans' premiums.
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The announcement came after the company reached a settlement agreement with a designated retiree committee that was formed after National Steel filed for bankruptcy on July 10, 2003. National Steel said providing employer-sponsored medical coverage at reduced costs met most of the committee’s concerns about affordable, continuing medical coverage, including prescription drugs, with no pre-existing condition limitations, according to news sources.

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“Offering a choice of alternatives permits those retirees most in need of their current benefit level to elect to continue it for a period of time, while presenting a more affordable option with reduced benefits to those retirees unable to afford continuing their present level of benefits,” retiree committee Leon Judd said in a statement.

After the July 31 discontinuation of benefits, the retirees will have a three-pronged choice when if comes to their future health care:

  • pay for the continuation of their existing medical coverage through October 2003
  • pay for employer-sponsored coverage with reduced rates and benefits
  • find their own medical coverage.

Objections to National’s motion to terminate benefits may be filed with the US Bankruptcy Court until 4 p.m. central time Monday in the Northern District of Illinois Eastern Division. If any objections are filed, a hearing will be scheduled for 9:30 a.m. central time on July 24.

Help From Outside

After the announcement, the Independent Steelworkers Union (ISU), which does not represent National retirees, announced plans to step in and help the retirees affected by the decision. “This is a very, very sad situation,” ISU President Mark Glyptis said . “It’s a travesty.”

Glyptis said National retirees have received letters in the mail this week informing them they will have no health care benefits in two weeks and many of them are ill-equipped to deal with the situation. “Our retirees are faced with, ‘Do I eat or buy medicine?”’ Glyptis said. “Either one of them is a pretty devastating result.”

Calling this not a union issue but “a people issue,” Glyptis said the ISU is currently working on putting together a group health plan through the union at special rates. Even though he sees this as a difficult task, particularly for participants with pre-existing conditions, Glyptis was confident in the union’s influence with the insurance companies to offer a low-cost solution.

Investing July 17, 2003

Jobless Claims Turn Down

July 17, 2003 (PLANSPONSOR.com) - The good news in Thursday's regular jobless claims report was that the number of Americans queuing up for initial benefits plunged by 29,000 last week. The bad news: the total is still well above a recessionary benchmark.
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According to US Department of Labor (DoL) data for the week ending July 12, claims dropped to 412, 000 from a revised 441,000 the week before.  The four-week moving average – a closely watched figure because it irons out short-term volatility – was 424,000, down 3,500 from the previous week’s revised average of 427,500.

The DoL reported that the number of Americans clinging to the jobless rolls during the week ending July 5 was 3.65 million, a decrease of 117,000 from the preceding week’s revised level of 3.77 million. Analysts were expecting 425,000 new claims for the latest report.

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The DoL’s data for the July 12 week follows two consecutive weekly gains in jobless claims to a 439,000 total for the July 5 week (See  Initial Jobless Claims Jump For Second Week).  T he government also reported last week that the nation’s June unemployment rate shot up to 6.4% from May’s 6.1%, representing its highest level since April 1994 (See Jobless Claims Spike Higher For Week, Month ).

Economists continue to fret about the fact that the jobless claims totals have been stuck above the 400,000 mark – a widely accepted indicator of a sluggish employment market.

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