Local 237 Cuts Retiree Benefits For Under-65s

By MEREDITH KOLODNER

Prescription drug and death benefits for Teamsters Local 237 retirees will be scaled back beginning in July due to rising health-care costs.

Only non-Medicare eligible retirees will be hit by the advent of a $100 deductible for prescription drugs and co-pays that will rise from $5 to $15 for generic drugs and from $15 to $25 for brand-names. About 2,000 of the 8,500 current retirees will be affected, according to union officials. The families of all retirees who die after July 1 will no longer receive the $2,500 death benefit.

'Couldn't Stay Ahead'

"The price of drugs caught up with us," said Paul E. Juergensen, the director of Local 237's Retirees' Benefit Fund.

The fund has been coping with 12-percent average annual increases in drug prices for the past several years. Mr. Juergensen said the local has absorbed the rising costs by tapping its significant financial reserve. The death benefits have been paid out to an average of 250 members per year, for an approximate total of $625,000 annually.

"We've had a very lucrative fund for a long time," he said. "We kept all the benefits for as long as we could."

The director noted that many union funds were reducing benefits since Medicare Plan D produced far lower income than expected. Most retiree funds manage Medicare benefits as well as those for members who are not yet eligible for the Federal program.

"There was the expectation that Medicare Plan D might help to offset the high cost of prescription drugs for everybody," said Mr. Juergensen, including retirees not yet eligible for Medicare.

Trim Operating Costs

He added that the trustees were looking to cut 10 percent in administrative costs to help stem the fund's operating losses. The shortfalls are primarily due to prescription drug costs, which account for 65 percent of the fund's total expenses.

Mr. Juergensen said that union officials would push for larger city contributions to the local's Welfare Fund in future contract negotiations, but argued that a more fundamental resolution was needed.

"The real solution would be a national health-care program that works for everybody," he said. "There's been a lot of talk about it by people running for office, so we'll see if anything happens in the next couple of years."