The University of Maine System will pause its switch to a new retiree health care plan after the system came under fire for unveiling drastic changes to the health benefit without informing retirees ahead of time and negotiating the change through collective bargaining.
The system said Thursday afternoon that it will work with retiree representatives and union leaders to look for alternatives and assess what health care coverage to offer former employees starting next year.
The announcement came hours after 11 University of Maine System retirees filed a lawsuit against the public university system over its switch to the new retiree health plan that the retirees say violated their contractual rights and will result in higher health care costs for many.
The change rolled out in August, first reported by the Bangor Daily News, would have switched university system retirees from a defined benefit to a defined contribution plan for the health benefits they receive. A defined contribution plan provides retirees a certain amount of money to access undefined health benefits. A defined benefit plan entitles retirees to benefits outlined ahead of time, irrespective of cost.
The switch was expected to save the public university system $2.5 million annually on its retiree health insurance benefit, which fills Medicare coverage gaps for eligible retirees. But retirees have raised concerns that the switch will increase their health care costs in the middle of a pandemic.
“We remain committed to our retirees and providing them affordable, quality health care and will conduct our review quickly to resolve the concerns that have been raised to ensure that retirees have a clear decision in time for January 1, 2021 coverage,” Chancellor Dannel Malloy said.
The head of the union representing University of Maine System professors said he was “pleased to see the University of Maine System finally understand there are serious problems with the switch in health care plans for our most vulnerable retirees.
“This pause in transition is a step in the right direction and the unions are eager to speak with the administration about the change, its impact on retirees, and ways we hope they can correct the problems this transition is creating for retirees and current staff,” said Jim McClymer, an associate professor of physics at the University of Maine and president of the Associated Faculties of the Universities of Maine.
University of Maine System employees and retirees have publicly protested the benefit changes at UMaine System trustees’ meetings since September. The faculty senates at five system universities have passed resolutions urging the Board of Trustees to revert to the old retiree health care plan.
After the trustees’ November meeting, the system announced plans to hire an independent consultant to field questions from retirees about their new health care coverage and update trustees on the switch.
Elected officials have also become involved.
In a September letter to Malloy, most Maine Senate Democrats and 47 of the party’s House members equated the change to “pulling the rug out” from retirees.