Xerox to eliminate its retiree flex program
Posted at: 09/18/2012 11:57 AM
| Updated at: 09/18/2012 6:11 PM
By: Ray Levato | WHEC.com
Xerox announced a change in health care coverage for its retired workers. Xerox says it will no longer offer health care coverage through the company for Medicare-eligible retirees. The company says retirees can often find a better deal in the private marketplace.
Xerox stopped paying for the cost of health care for retirees over age 65 in 2010. What the company is cutting now is a supplemental Medicare plan offered through the company. Retirees have already been paying all of that cost themselves.
It was thought that coverage through Xerox would be cheaper than the private marketplace. But Xerox says it’s seen a steady migration out of the company plan because of increases in premiums. Only about 20% of eligible retirees still take the company coverage. That’s about 3,000 out of 15,000 eligible.
George Conboy, Brighton Securities President said, “It is a small negative for retirees. With Xerox, a company that has had its strugglers over the last ten years, most Xerox retirees has been expecting some form of benefit cuts. Part of the reason Xerox has managed to stay afloat is they've made some acquisitions and they've been aggressive about cutting their costs. While this is bad news for Xerox retirees, it's actually financially an improvement for Xerox's situation.”
This is a double whammy for retirees in Rochester. On Monday, Kodak announced for retirees and laid off Kodak workers. They will no longer be eligible to receive a lump sum payout for their pensions for the rest of the year.
Conboy says this is just more of the changing relationship between Rochester’s large employers and their retirees.
The change at Xerox takes place in January. Xerox-sponsored health care coverage—medical, dental, vision and prescription drug, will no longer be available for post age 65 retirees.