A group of retirees from one of the state’s largest utilities, led by a former top corporate officer, is protesting planned changes in health care benefits that they argue will “significantly harm” them and violates an agreement going back a decade.
More than 200 non-union, retirees of Orange-based United Illuminating Co. and their dependents are asking the state Public Utility Regulatory Authority to hold UI and its parent company Avangrid, Inc. to an agreement dating back to 2015 that stated there would be no changes to retirement benefits, the retirees said in an Aug. 19 letter to PURA chair Melissa P. Gillett.
The guarantees were part of the regulatory approval of UI’s acquisition in 2015 by Spanish energy giant Iberdrola. The acquisition led to the creation of Avangrid, Inc. that combined UI with Iberdrola’s U.S. operations.
PURA, which is reviewing a request for an increase in rates from UI, already has ordered the company to respond by Sept. 12, addressing the assertions in the retirees’ letter. State Senate President Pro Temp Martin M. Looney, D-New Haven, has increased the pressure on the company, asking PURA to include in its decision on rates, a requirement that UI keep its promises to the retires.
UI officials told The Courant Tuesday that the decision on the health benefits is “fully compliant with the agreement that PURA approved” in 2015. A more detailed analysis will be submitted to PURA as has been ordered, UI officials said.
In the letter to PURA’s Gillett, signed by Anthony J. Vallillo, the former UI president who is now retired, said the benefits — including post-retirement medical cost reimbursements — were granted to non-union retirees and their dependents. The guarantees pertained to those hired prior to May, 1992, and became part of the larger merger agreement that was subsequently approved by shareholders and regulators.
Some retirees of United Illuminating Co, have complained to state utility regulators about planned changes to their health care benefits. (Matthew Chagnon, PSNH)
“…we were entitled to partial (in some cases, full) reimbursement of annual Medicare Part B premiums and an annual funding of $1,800 for the retiree and $1,800 for the retiree’s eligible dependent(s) which was funded in a health reimbursement account, or HRA,” the letter said.
Medicare Part B covers ambulance services, durable medical equipment, mental health and substance abuse care, clinical research and oxygen equipment, among other things.
According to the letter, Avangrid told the retirees in a June 30 written notification that in a would be terminating the Medicare Part B reimbursement and reducing the annual base amount of the HRA to $1,000. The changes would go into effect Jan. 1.
“We retirees have depended on these benefits and are significantly harmed by Avangrid’s stated plans,” the letter said. “Some long, retired individuals are particularly harmed as inflation over the years has significantly eroded their benefits.”
On Tuesday, Looney blasted UI’s move in a release, calling it “a betrayal of these employees and of the terms of the 2015 acquisition agreement.”
Connecticut Sen. President Pro Temp Martin Looney Tuesday blasted one of Connecticut’s largest utilities for planned changes to retiree health benefits. (Courant File Photo)
Looney noted the utility is currently seeking to raise electric rates.
“It appears disingenuous for the company to claim it needs to increase rates to cover retiree costs at the same time that it is breaking its promises and cutting retiree benefits,” Looney said.
Sarah Wall Fliotsos, a UI spokesperson, said the utility is adjusting its retiree benefits packages to align with recent innovations in the health care marketplace.
“With out-of-pocket medical expenses consistently on the rise, we are glad to be able to offer an additional $3,000 to help offset the costs in the new ‘variable subsidy’ offering under this revised healthcare plan for UI and UIL retirees,” Fliotsos said, in a statement.
“As always, we remain committed to ensuring we are offering the best-in-class healthcare options for our retirees, while considering the costs of any programs that are borne by our customers,” Fliotsos said.
According to company officials:
Beginning Jan. 1, UI’s benefit packages for retirees will modernize the health reimbursement account (HRA) to provide retirees increased funding in an unforeseen bad health year. With this new HRA plan, UI will deposit additional subsidies (known as the variable subsidy) into retirees’ accounts that can be used for eligible out-of-pocket medical expenses, totaling up to $3,000.
The base subsidy in the HRA account, totaling $1,000, can also be used to pay for all plan premiums, including Medicare Part B premiums. UI non-union retirees currently receive $1,800 for their total HRA .Currently, there is no division between a base and variable subsidy.
Kenneth R. Gosselin can be reached at kgosselin@courant.com.
