Pfizer to Cap Retiree Health Benefits: Out of Time? Out of Luck.

Last Updated Sep 21, 2009 5:38 PM EDT

Pfizer is to cap the amount of healthcare benefits it will pay to retired employees based on their years of service with the company, according to The Day. Any retiree who hasn't worked long enough for Pfizer or who has expensive medical bills may find Pfizer's willingness to continue covering them has a limit.

Under the new "Total Rewards" program, Pfizer employees earn a "Retiree Medical Subsidy" based on their years of service. The Day gives this example:

Mary, the hypothetical Pfizer employee in the brochure example, retires from Pfizer after 20 years of service, with an RMS of $220,000. The annual cost of coverage for Mary and her spouse is hefty in the five years before she is eligible for Medicare, and by the time she is 64 it is costing her $8,118 a year and Pfizer, paying from her RMS, is contributing another $13,500.
By the time she is 80, Mary's RMS is depleted and she then, the brochure blithely reports, "is responsible for the full cost for her coverage."
That coverage will then cost her $24,000 a year, based on the hypothetical scenario.
A Pfizer spokesperson told the paper:
The sole motivation was to harmonize a number of legacy benefits into a single benefit plan, making it simpler for retirees to make choices.
(Pfizer has been through so many mergers it is now essentially a conglomeration of several smaller companies.)

One anonymous Pfizer employee complained that because the changes will only affect those retiring after January 1, the company is trying to force more retirements ahead of the merger with Wyeth, which will create 19,000 layoffs. Of course, any ex-Pfizer retiree who has no job and no health coverage can ask Pfizer for free prescription drugs.