In a shocking 4-3 decision, the Tennessee Valley Authority moves to cut retiree benefits for 2017!
This summer, the Board of the Tennessee Valley Authority (TVA) announced a shocking move: TVA Retiree benefits would be ending December 31, 2016.
For many years, retirees had been offered a type of retirement plan that functioned like a TVA Medicare Supplement plan. Unlike other Medicare Supplement plans, the TVA retiree plan did allow spouses to be covered by the plan. The recent changes to the retirement benefits may put spouses’ benefits at risk.
For a company that has been so generous to retirees in the past, this 4/3 decision by the TVA Pension Board on August 8, 2016 surely shocked a lot of former employees. Back in May of 2016, the Pension Board hosted a special meeting to discuss employees’ retirement benefits. Just a matter of months later, these changes were voted into effect.
Over 33,000 TVA employees, family members and retirees are covered by TVA retiree benefits and will be affected by TVA stripping its Medicare Supplement benefits.
TVA retirees are also facing changes to their retirement income benefits, to add more fuel to the fire.
The company cited increases in health care costs as its primary reason for changing plans, but seniors who have been depending on the coverage for many years are unhappy, regardless of the reason for the change.
TVA claims it is $6 billion in the hole and needed to make these changes to be able to fund retiree plans moving forward. TVA projects in just a few dozen years, they will be able to restore the benefits back to their former glory. In the meantime, TVA retirees whose benefits are being pulled out from under them are suffering.
The last day of coverage under the existing TVA Medicare Supplement plan is December 31, 2016. It’s critical the 15,000 retirees covered by the TVA plan select a new Medicare Supplement plan as soon as possible to avoid lapses in insurance coverage.
TVA is partnering with one insurance brokerage company to offer benefits to its members – however, the prices of the newly-backed TVA plans are astronomically higher than other plans TVA retirees qualify for! The high prices have left many wondering why TVA insurance has gone from great to bad, seemingly overnight.
Many retirees are complaining about the confusion of the new plans and that the company offering the plans, and TVA, is not doing enough to prepare its seniors. “[Educational presentations] need to be offered in Chattanooga!” complained Tanya on the TVA Retiree Facebook page. Tanya should not have to make an effort to find a new healthcare plan; she needs a good Agent to assist her with the process.
My Medicare Partners welcomes TVA retirees and is happy to provide a no-obligation plan comparison for any retiree wanting to understand all their options!
Skeptics share that just a few years ago, TVA’s retirement plans were overfunded, causing them to stop contributions of the plan for a bit. Opponents to the changes tried to organize Congress to prevent the decrease in benefits for retirees, but they were unsuccessful.
The Union that represents TVA employees shared that TVA’s Chief Executive, William D Johnson, may be among the highest paid of any federal employee at $6.4 million a year. Union leaders and Mr. Johnson have already verbally sparred, with Mr. Johnson allegedly saying he has ties to lawmakers and would be able to beat any challenges the union brought to the proposed changes. Apparently, his influence was enough and now TVA retirees’ benefits are suffering because of it.
TVA was created in 1933 by Congressional Charter to help bolster the failing Tennessee Valley area which suffered greatly after the Great Depression. With employees spread throughout Tennessee, Alabama, Kentucky, Mississippi, Georgia, Virginia, and North Carolina, TVA now has branched into many modern advances such as solar and wind renewable energy.
“I’m not sure at this point if it is going to cost less for retirees and whether they will have better coverage as a result,” said Suzan Bowman, Chair of the TVA Retirees Association. Even the retirees’ own association is skeptical of the changes to their benefits!
Newer employees will also suffer from these changes and the company’s pension plan will now be replaced by a 401(K) matching plan. Employees and retirees are disgruntled by this move, especially since TVA’s Chief Executive, Johnson, made himself and his executives exempt from the reductions in benefits.
“Had TVA continued the previous higher level of contributions, investment gains would have been ever greater and the pension would have been much better able to survive future market declines,” said the TVA Retirees Coalition.
Of course, the TVA executives who are taking away retirees’ healthcare had a different spin to put on the situation.
“This new approach [to choosing a Medicare plan] gives you the freedom to choose the coverage that best meets your needs based on a broad selection of plans available,” said Sue Collins, Senior VP and head of Human Resources for TVA in a recorded video. “It gives you the flexibility to shop for the right level of coverage for you and lets you decide how to best spend your healthcare dollars.”
We couldn’t agree more that seniors should search several different insurance carriers to find the plan that best meets their needs – but the new Medicare plans TVA is endorsing and suggesting to its retirees appear to be overpriced.
Even more shockingly, TVA will only continue to offer spousal benefits to spouses of retirees if the retiree elects to enroll in the new TVA-backed plans. Many TVA retirees feel like they’re being forced into the new plans. This is especially of concern for TVA retirees who have a non-Medicare-eligible spouse, who was previously covered by the old TVA retiree plan: if the TVA retiree now chooses to elect an non-TVA plan, their spouse will have to find health care coverage elsewhere. Of course, private insurance and Marketplace plans can be purchased for spouses who are losing their healthcare coverage due to changes in TVA’s retiree plan.
My Medicare Partners has already saved TVA retirees and their spouses hundreds of dollars by choosing a different Medicare option for 2017. It’s important to check options in addition to the TVA-endorsed options, as other Medicare Supplement plans are available with the same benefits at much lower rates!
Take the advice TVA is giving and shop around for a new Medicare Supplement plan! Don’t be limited by plans TVA is backing. Get a free plan comparison today from dozens of the top-rated insurance companies!