Retirees of Lucent Technologies
Inc. filed suit, saying the company illegally overcharged an estimated
120,000 management retirees for their health coverage and terminated
coverage for many retirees’ spouses.
The lawsuit, filed by three retirees in U.S. District
Court in Newark, N.J., maintains that Lucent, of Murray Hill, N.J.,
violated Internal Revenue Service rules when it cut the retirees’
health coverage. The rules state that when employers use the assets
from the employees’ pension plan to pay the employer’s share of their
retiree health-care costs, the employer can’t subsequently cut the
retirees’ health benefits for five years.
While these “maintenance of benefits” rules allow
employers to make some modest reductions to coverage during the
five-year moratorium, the suit alleges that Lucent exceeded the
reductions allowed when it made a series of more than 10 benefits cuts
from 2001 to the present, including increasing co-payments and
premiums, and eliminating company-paid coverage for dependents.
