Federal Judge Blocks Retiree Health Care Charges at Catepillar

September 17, 2008 (PLANSPONSOR.com) - A federal judge in Nasvhille has blocked efforts by Catepillar to charge Catepillar Logistics Services (CLS) retirees for their health care.

According to a news release by lawyers for the workers, U.S. District JudgeAleta A. Trauger issued a preliminary injunction forcing Caterpillar to provide the CLS retirees with the same health coverage package as they do for other employees retired before January 1, 1992.

The news release said Trauger found that CLS employees who retired before a 1991 labor dispute ended had their retiree health-care benefits vest under a 1988 agreement, which provided premium-free retiree health care (see Caterpillar Retiree Benefits Suit Gets Green Light ).

Trauger rebuffed Caterpillar s argument that the CLS retirees were automatically subject to conditions it unilaterally implemented during the labor dispute that imposed a cap on retiree medical benefits.

The injunction blocks the company from deducting monthly charges for retiree health care from the pensions of the CLS employees – ranging from $115 to $250 per month. Caterpillar was also enjoined from charging the retirees deductibles of $300 (for individuals) or $600 (for families) before the health insurance applies.

The announcement said the workers’ lawyers presented evidence that the retirees were delaying surgery, stopping their prescribed medications, and putting off doctor visits to reduce their increasingly unmanageable medical costs.