Deere Introduces Innovative Retiree Health Care Approach
MOLINE, Illinois. — Deere & Company is changing health care benefit programs for some of the company’s retirees but emphasized that the changes maintain the value of John Deere’s financial support. Communication to those who are affected began this week.
This new approach leverages changes to federal law that have been adopted in recent years and the new programs also allow greater flexibility for retirees to choose and fund a health care benefits program that meets their individual circumstances.
Deere said less than 5,000 of the company’s 28,000 retirees and their dependents will be part of this change. The company has various segments of retirees based on whether an employee worked in a wage or salaried position and also on when the individual retired. Those affected by today’s announcement are in a group of salaried employees most of whom retired or will retire on or after July 1, 1993. That date is later for certain subsidiaries of the company.
The new programs are made possible by recent federal legislation that created tax-advantaged Health Savings Accounts and by the adoption of the Medicare Modernization Act of 2003. Although Deere’s overall financial support remains comparable, the change comes in how health care coverage is purchased.
For Medicare eligible retirees, Deere will provide retiree medical credits and retirees are encouraged to use the funds to purchase a Medicare Advantage plan and a prescription drug plan through private insurers. In addition, Deere has contracted with an outside service to provide support to retirees in making their personal plan selections.
Retirees who are not yet eligible for Medicare will choose one of the two health plans options that current salaried employees moved to in January of this year. These plans allow out-of-pocket medical expenses to be paid with tax-free dollars, involve retirees and employees more in health care decisions, and leverage tax-advantaged Health Savings Accounts that can be used for current or future health care expenses.
One year ago, Deere informed retirees that changes should be expected this year as Deere continues its efforts to provide competitive, quality health care benefits while also addressing the long-term impact of health care costs.
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