Rouse retirees lose health benefitsGeneral Growth Properties Inc., the Chicago real estate giant that bought the Columbia developer Rouse Co. in November, is dropping company-paid health and life insurance for Rouse retirees - a move that follows a national trend but breaks with Rouse's tradition of comfortable benefits.
Retirees over 65 will be offered Medicare supplemental policies through AARP when coverage ends Dec. 31, but will have to pay up to $250 per month per person. Those under 65 can buy the coverage General Growth offers to its active employees.
In 350 to 400 registered letters sent to retirees' households in the past few days, General Growth said "the most important factor" in its decision was that its own retirees don't receive the benefits. "This was about equity," said Bob Rubenkonig, a company spokesman.
Jim Roberts, 71, of Columbia, a former vice president in Rouse's shopping center division, took an early retirement package in 1991 that included health benefits. His wife is also covered by the Rouse retiree benefits.
He said his retirement documents disclosed that the coverage could be modified or canceled, but he relied on Rouse, which had a reputation for treating its employees well. "I'm not naive enough to think it couldn't happen," he said, "but I never thought it would."
Actually, it's happening more and more.
Nationally, 80 percent of large private employers offered health coverage to retirees over age 65 in 1991, but that's now down to 55 percent, according to Hewitt Associates, a benefits consulting firm. (The Maryland Health Care Commission, which reports on insurance coverage in the state, doesn't have comparable local data.)
Terminating retiree benefits "has become something of a fad," said Ron Blackwell, chief economist for the AFL-CIO.
But outright terminations of retiree health plans - cutting off those already covered - are less common than companies canceling the benefit only for future retirees. "Those primarily affected are new hires," said Tricia Neuman, vice president of the Kaiser Family Foundation. "You do hear about distressed industries pulling benefits," Neuman added.
General Growth isn't in the distressed category. Last year, it posted $734 million in operating income (on $1.8 billion in revenue), an increase of 35 percent over its 2003 profits.
