IBM Medicare Advantage Retiree Medical Benefits as deferred income and how IBM is stealing deferred income

 Updated 11/30/2022:

This might be a useful reference for you to use.  There was employment research done in 2012 by the Upjohn Institute for Employment showing retiree medical benefits are a form of deferred income.  

I am going to use this research as the basis of a labor complaint in my state.  I am going to file a complaint with the NYS Attorney General accusing IBM of stealing some of my deferred income.  In NY, it is the Attorney General that handles unpaid wage complaints. Sometimes states handle these complaints through the state department of labor.  

This is the premise for my complaint.  For years, IBM told me to consider my retiree benefits as part of my total compensation.  The Upjohn Institute research confirms retiree health benefits are a form of deferred income.  IBM even told me the dollar value of my deferred income, which they said was $3,000/year.  I believe they are under valuing it, but I have no way to prove it.  At least I was able to spend $3,000/year of my total deferred compensation on medical insurance of my choice.  

In 2023, IBM said it will keep the rest of my deferred compensation and told me, from now on, they will spend it for me.  I believe that is called stealing.  I multiplied the number of years I worked for IBM times $3,000 to determine the total amount of my deferred compensation. I then subtracted the amount already paid to me through 2022 to determine how much money IBM still owes me. I want  IBM to pay me what they still owe me. (Retirees with FHA accounts don't have to do any calculations. They know exactly what IBM owes them.) I will ask the AG to require IBM to pay me the rest of my deferred income.

Here is a link to the research as well as the Abstract.

https://research.upjohn.org/up_workingpapers/182/

Abstract

Are early retiree health benefits (RHBs) a form of deferred compensation that binds workers to an employer? Most employers who offer RHBs offer them only to workers who have 10 or more years of tenure with the firm and have reached age 55. Accordingly, workers in firms offering RHBs have an incentive to stay with a firm in the years before they attain eligibility for RHBs, and a greater incentive than otherwise to retire thereafter. We test for the existence of such a pattern of incentives by examining the age-specific relationship between workers’ eligibility for RHBs and retirement. The findings suggest that workers in RHB-offering firms are less likely to retire at ages 50 and 51 than similar workers in firms that do not offer RHBs. Also, RHB-eligible workers aged 60 and 61 are more likely to retire than similar RHB-ineligible workers. Such a pattern is consistent with RHBs acting as part of a delayed-payment contract of the kind described by Lazear (1979, 1981).

Updated 12/2/2022

A few old news articles about how companies are messing with our deferred compensation to improve their bottom lines.  This is why I believe the only way to push back is to demand IBM pay me the remainder of my deferred compensation.  I filed my Attorney General  complaint to that end yesterday:

https://www.wsj.com/public/resources/documents/SB107940131862956349.htm

https://www.jonesday.com/en/insights/2009/08/retiree-medical-litigations-dirty-little-secret-location-location-location

Updated 12/4/2022

  

Even the IRS describes retiree health benefits as deferred compensation. The following is a link to a document from the IRS describing corporate rules for these benefits:

https://drive.google.com/file/d/1YpRjYNdrWUHrETi8FHV9jXyyUpDReYoo/view?usp=share_link

In case you don't remember how IBM structured the FHA account, this is a great description AND, again, shows it was "deferred compensation"

https://www.businessinsurance.com/article/19990523/story/1000456/ibm-debuts-innovative-health-plan-for-retirees

Updated 2/18/2023

The following is a link to a marketing brochure from a company that is selling Medicare Advantage plans to corporations who have retiree health benefits.  In the brochure, it states it will cost the corporation nothing to offer these plans.  More evidence that IBM is stealing from its retirees.  

https://drive.google.com/file/d/1X1C6agvoll-bBK5Rj-R1qkQXhKT6vTA3/view?usp=share_link

IBM Medicare Advantage 2023 Protest Action: Complain to your US Senators!

 I contacted several class action lawyers over the last two months and described the IBM Medicare eligible retiree healthcare changes for 2023 demanding we use Medicare Advantage plans.  There doesn't appear to be class action ability to stop IBM from doing it.  We don't have a contract with IBM. What we have is a verbal agreement,  promises to provide retiree benefits made long ago without any legal, binding commitment. 

The reason the NYC retired workers were able to stop their former employer was because they have a union contract and a clause specifically guaranteeing free lifetime health insurance.  NYC government tried to transition retirees to Medicare Advantage for free, but if retirees wanted to continue with Original Medicare and a Medicare Supplement it would be $193/mo.  My bet is NYC government will now remove the Medicare Supplement option in their next salvo and force all retirees onto MA plans. Reminder, many corporations have done this for years.

Actions don't have to be illegal to be WRONG.  In fact, consider how often wrong actions become illegal. A quick one that comes to mind is the use of seat belts or baby seats.  In the best interest of saving lives, not using them was made illegal.  In IBM's case, in the best interest of saving lives, elders shouldn't be forced to use Medicare Advantage plans to get their retiree medical benefits. It should be illegal!  

What's left to do?  I urge you to write to your U.S. Senators and ask for help.  Tell them how you feel about this situation.  Ask them to investigate how companies are treating retirees and taking away promised benefits retirees depended on to get high quality healthcare, which is particularly important for the aging. 

Here's how I view what is happening.  IBM made a long ago promise to provide retirees with high quality medical insurance when we retired as an incentive to convince us to stay employed at IBM. They described it as being part of our compensation. To pay that delayed compensation, they set aside funding comparable to what they did for our pensions. 

Now, they are taking compensation money away and shifting retirees to Medicare Advantage plans while claiming it is  a "better deal".  It is truly "liar, liar, pants on fire"!  Seriously, this is elder abuse, and/or a violation of  laws that protect workers' compensation. It is corporate malfeasance and the antithesis of Corporate Social Responsibility which major USA corporations claim to support.

US Senators gauge whether something is a worthy investigation based on complaints.  They investigated Medicare Advantage devious marketing practices because 40,000 people complained about it.  They investigated Medicare Advantage overbilling the federal government for billions of dollars because of whistle blower complains.  

Complain!  Complain! Complain!  Maybe we can embarrass IBM into backing off!