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Today we are announcing changes to our retiree benefits program designed to better balance the needs of Embarq retirees, employees, shareholders, customers and other stakeholders. Maintaining our strength in a fiercely competitive, perpetually changing industry such as ours never has been tougher than it is today. Outside competition, outdated regulatory policies, and out of control health care costs force us to challenge the status quo. Staying competitive sometimes requires that we make important choices. The changes being implemented will affect our retirees in three areas: Medical benefits for Medicare-eligible individuals and Medicare-eligible dependents, company-provided life insurance, and the Embarq matching gift program [which matches Embarq employees donations to nonprofits and alma maters].Medical benefits changes for Medicare-eligible individuals as of January 1, 2008:
Embarq will no longer offer medical coverage for Medicare-eligible retirees and Medicare-eligible dependents or provide a monthly subsidy for medicare premiums.
According to the 2006 National Survey of Employee-Sponsored Health Plans by Mercer Human Resource Consulting, only 19% of large US employers offer any form of medical coverage to Medicare-eligible retirees. Due to recent changes in the Medicare marketplace, it is more practical and efficient for Medicare coverage to be provided to Medicare-eligible individuals by a health care benefits company that specializes in this type of coverage.
This approach gives retirees greater flexibility in choosing the best coverage for their family situations. Adjusting to this change may be difficult for some, so Embarq is committed to making the transition as smooth as possible for retirees and their families. A national carrier identified by Embarq will contact all medicare eligible individuals and offer to help them understand their alternatives for medicare coverage. This company will provide convenient, user friendly support, and conduct informational meetings. Other carriers likely will offer coverage options to medicare eligible individuals as well, and retirees will be free to choose their own carriers. Embarq is not endorsing any carrier or coverage option and encourages retirees to evaluate all coverage options.
Life insurance: The company-provided life insurance benefit extended to eligible retirees will be capped at $10,000. Optional life insurance purchased by retirees in the past can continue under the terms of those plans. This change will be effective on Jan 1, 2008. Also, the company provided life insurance benefit will no longer be provided for retirees participating in the Carolina telephone and telegraph company voluntary employees beneficiary association. Effective sept 1 2007. Any existing optional life insurance policy can be continuedâ€¦.
Matching gifts program: The Embarq matching gifts grant no longer will be aviailable to retirees for gifts made after September 1, 2007. Retirees will receive communications including a detailed brochure to explain all these changes. In addition they will be able to view this information onlin on the Embarq retiree website...
Senior Vice President of Human Resources