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For Immediate Release                                           Contacts: David Irwin (312) 458-3621

Thursday, September 18, 2008                                       Gerardo Cardenas (312) 458-3609 

 

CATERPILLAR CALLED OUT FOR CUTTING BACK ON RETIREES HEALTH PLANS

 

 In AARP-backed Case US District Court Says Company Must Stop Taking Premiums out of Pensions, Breaking Health Care Promise to Retirees

 

CHICAGO, Illinois – Delaying surgery, cutting pills or not taking their prescriptions at all and canceling visits to the doctor’s office due to cost – retires from Peoria, Illinois based Caterpillar (CAT) thought their company-promised health benefits would protect them from ever having to face these dire situations.  But when that promise was broken they sued, and after 2 and half years, they found a small victory this week in a US District Court telling CAT to stop unfair practices through a court imposed injunction. 

 

“Caterpillar chose to knock down the retirees who helped build the company up,” said Jay Sushelsky, an attorney with AARP’s Foundation who served as co-counsel in the case.  “They broke the promise of providing health care and we’re working to hold them accountable”

 

CAT retirees were promised health care for life as part of their contract for retirement benefit plans.  But between 1992 and 1998 employees didn’t have a contract; they believed the same plans would be in place for both themselves and their spouses.  Then in 2005, unexpectedly their premiums started to soar and health care related bills started to pile up, leaving many retirees and their spouses facing a health care crisis.

 

“Too many companies are choosing to hurt their retirees in order to improve their own bottom-line, and that’s a move in the wrong direction for all workers,” added Sushelsky. “All Americans deserve access to affordable health care, both in the workplace and in retirement.”

 

AARP and law firms from Illinois (Meites, Mulder, Mollica & Glink) and Tennessee (Lieff, Cabraser, Heimann & Bernstein) are representing the retirees in a class-action lawsuit, fighting CAT to ensure they kept the health care coverage promise to their retirees.  The ruling to stop CAT from deducting health premiums from retiree pensions and provide the same coverage to their spouses applies to a sub-group of 247 plaintiffs who were employed by Caterpillar Logistics Services.  The primary lawsuit regarding health care benefits to more than 4,000 retirees is still being litigated before the court.

 

AARP has found that while 23% of Americans have problems paying medical bills, 55% of all bankruptcies filed last year cited out of pocket health care expenses as the reason.  Nearly 30% say they have skipped treatments, tests or prescriptions because of costs, with only 4 in 10 retirees receiving company-sponsored health care benefits.  

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