Ripped from WSJ.
Quite sad really. I really think this a prime example where the Government should step in and help......these people paid a lot of taxes for many years.....and need help....moreso than the upper class that's benefiting from Bush's tax cut.
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Firms cut costs by firing disabled
JOSEPH PEREIRA
The Wall Street Journal
As it was preparing the sale of its assets to Bank One Corp. last July, Polaroid Corp. sent a letter to 180 disabled employees notifying them that they had been fired and their health, life and dental insurance were being terminated.
At the time he received the letter, Nelson Tauriac, a Polaroid forklift operator for 21 years, was bed-ridden, his feet swollen to three times their normal size because of kidney disease. John Magenheimer, who had headed a Polaroid research laboratory, was recovering from surgery in which one of his ribs was removed so doctors could cut out a cancerous tumor pressing against his heart. Elizabeth Williams, a senior human-resources administrator, was at home, doubled over with pain from a form of lupus that attacks the lungs and muscles.
"I couldn't believe this was happening," recalls Magenheimer, who says his wife showed him the letter as he lay "in a fog" from chemotherapy and radiation treatment. "How could Polaroid do this to me? For more than 20 years I gave them everything I had."
Worker casualties
Across the corporate landscape, disabled workers are becoming an increasingly common casualty of the drive to cut costs. As recently as three to five years ago, most companies paid health benefits for the long-term disabled until they were 65 years old, according to James Curcio, a senior consultant for Washington Business Group on Health, a trade association that helps companies contain health-care costs. At 65, federal Medicare benefits kick in.
But as health-insurance costs and the number of disabled employees climb, more companies are firing them. A Mercer Human Resource Consulting study last year found that 27 percent of the 723 companies surveyed dismiss employees as soon as they go on long-term disability and that 24 percent dismiss them at a set time thereafter, usually six to 12 months. (Dow Jones & Co., which publishes The Wall Street Journal, terminates employees six months afterward.) The survey found 15 percent keep the disabled on as employees with benefits until age 65.
Magenheimer and the other employees fired by Polaroid were on long-term disability leave because of injuries or illnesses that left them too incapacitated to work. They are entitled to be compensated at 60 percent to 70 percent of their regular pay through a combination of social security disability benefits and payouts from disability-insurance policies purchased by Polaroid.
They still receive that money. But the loss of their other benefits - especially their health and life insurance - has brought them additional financial burdens at a time when they already are struggling with reduced income and the ravages of cancer, heart disease and other serious conditions.
The federal law known as COBRA mandates that they can keep the health insurance they had at Polaroid for 18 months after their dismissal. Some companies pay the premiums, but most, like Polaroid, require employees to pick up the tab themselves. Disabled workers can purchase Medicare coverage after 18 months. Both kinds of coverage cost thousands of dollars a year, which many disabled workers can ill afford. Because people on long-term disability continue to receive a portion of their salaries, they are typically not eligible for the Medicaid program that offers poor Americans health insurance.
Kevin Pond, a Polaroid spokesman, says that Bank One took over Polaroid with the understanding that the new management would decide whom to hire and whom to let go.
"Even though the old Polaroid maintained their employee-like status, the (workers on long-term disability) were not real employees," he says.
In response to a letter to Polaroid by U.S. Rep. William Delahunt of Massachusetts, who had written on behalf of constituents who worked there, Polaroid general counsel Neal Goldman noted that the company had preserved the benefits as long as it could, despite "enormous pressure to dramatically reduce costs" during bankruptcy.
Takeovers cut workers
The disability-payment squeeze is likely to continue for companies and their employees. About 5.5 million people received long-term disability benefits last year, according to the U.S. Department of Labor, a 62 percent jump from 1992. The reasons for the big rise aren't completely understood, but the most cited explanation is an aging work force.
Bankruptcies and takeovers often spur companies to fire disabled workers. When International Steel Group Inc. acquired the assets of LTV Corp. last year, it rehired many of the able-bodied workers who had been dismissed in LTV's bankruptcy proceeding. It didn't rehire the hundreds of employees on disability. When MMI Co., a medical consulting and insurance firm in Deerfield, Ill., in 1999 acquired Applied Risk Management Inc. of Oakland, Calif., which administers worker's compensation programs for companies, it only hired ARM employees who weren't on medical or extended leave. Five employees on long-term disability leave weren't hired.
MMI has since been acquired by St. Paul Cos., an insurance concern. A spokeswoman declined to comment. Mitch Hecht, vice president of external affairs at International Steel, says, "It's strictly an arithmetic fact that the profits are not being generated to cover the costs of all the health care programs of workers from the past." The company views the plight of the disabled workers as a tragedy and calls on the government "to come up with a broad solution to fix the problem," Hecht says.
Polaroid began its downward spiral in the mid-1990s, as digital cameras and cheap, one-hour developing ravaged its niche of instant photography. With nearly $1 billion in debt, Polaroid filed for bankruptcy-court protection in October 2001. Nine months later, One Equity Partners, a Bank One investment arm, acquired its assets.
Suing for discrimination
Williams, who has been on disability since 1988 because of her lupus and diabetes, recruited some of her ex-colleagues to hire attorney Harvey Schwartz, who filed a discrimination case last week in federal court in Boston. Polaroid and One Equity "got together and consciously planned to discriminate against people who were receiving" long-term disability benefits, says Schwartz, of Boston. The new Polaroid hired able-bodied workers, but their disabled colleagues "were intentionally not hired because they were disabled," Schwartz added. A spokesman for Polaroid, under One Equity's management, declined to comment on the suit.
Quite sad really. I really think this a prime example where the Government should step in and help......these people paid a lot of taxes for many years.....and need help....moreso than the upper class that's benefiting from Bush's tax cut.
----------------------------------------------------------------------------------------------
Firms cut costs by firing disabled
JOSEPH PEREIRA
The Wall Street Journal
As it was preparing the sale of its assets to Bank One Corp. last July, Polaroid Corp. sent a letter to 180 disabled employees notifying them that they had been fired and their health, life and dental insurance were being terminated.
At the time he received the letter, Nelson Tauriac, a Polaroid forklift operator for 21 years, was bed-ridden, his feet swollen to three times their normal size because of kidney disease. John Magenheimer, who had headed a Polaroid research laboratory, was recovering from surgery in which one of his ribs was removed so doctors could cut out a cancerous tumor pressing against his heart. Elizabeth Williams, a senior human-resources administrator, was at home, doubled over with pain from a form of lupus that attacks the lungs and muscles.
"I couldn't believe this was happening," recalls Magenheimer, who says his wife showed him the letter as he lay "in a fog" from chemotherapy and radiation treatment. "How could Polaroid do this to me? For more than 20 years I gave them everything I had."
Worker casualties
Across the corporate landscape, disabled workers are becoming an increasingly common casualty of the drive to cut costs. As recently as three to five years ago, most companies paid health benefits for the long-term disabled until they were 65 years old, according to James Curcio, a senior consultant for Washington Business Group on Health, a trade association that helps companies contain health-care costs. At 65, federal Medicare benefits kick in.
But as health-insurance costs and the number of disabled employees climb, more companies are firing them. A Mercer Human Resource Consulting study last year found that 27 percent of the 723 companies surveyed dismiss employees as soon as they go on long-term disability and that 24 percent dismiss them at a set time thereafter, usually six to 12 months. (Dow Jones & Co., which publishes The Wall Street Journal, terminates employees six months afterward.) The survey found 15 percent keep the disabled on as employees with benefits until age 65.
Magenheimer and the other employees fired by Polaroid were on long-term disability leave because of injuries or illnesses that left them too incapacitated to work. They are entitled to be compensated at 60 percent to 70 percent of their regular pay through a combination of social security disability benefits and payouts from disability-insurance policies purchased by Polaroid.
They still receive that money. But the loss of their other benefits - especially their health and life insurance - has brought them additional financial burdens at a time when they already are struggling with reduced income and the ravages of cancer, heart disease and other serious conditions.
The federal law known as COBRA mandates that they can keep the health insurance they had at Polaroid for 18 months after their dismissal. Some companies pay the premiums, but most, like Polaroid, require employees to pick up the tab themselves. Disabled workers can purchase Medicare coverage after 18 months. Both kinds of coverage cost thousands of dollars a year, which many disabled workers can ill afford. Because people on long-term disability continue to receive a portion of their salaries, they are typically not eligible for the Medicaid program that offers poor Americans health insurance.
Kevin Pond, a Polaroid spokesman, says that Bank One took over Polaroid with the understanding that the new management would decide whom to hire and whom to let go.
"Even though the old Polaroid maintained their employee-like status, the (workers on long-term disability) were not real employees," he says.
In response to a letter to Polaroid by U.S. Rep. William Delahunt of Massachusetts, who had written on behalf of constituents who worked there, Polaroid general counsel Neal Goldman noted that the company had preserved the benefits as long as it could, despite "enormous pressure to dramatically reduce costs" during bankruptcy.
Takeovers cut workers
The disability-payment squeeze is likely to continue for companies and their employees. About 5.5 million people received long-term disability benefits last year, according to the U.S. Department of Labor, a 62 percent jump from 1992. The reasons for the big rise aren't completely understood, but the most cited explanation is an aging work force.
Bankruptcies and takeovers often spur companies to fire disabled workers. When International Steel Group Inc. acquired the assets of LTV Corp. last year, it rehired many of the able-bodied workers who had been dismissed in LTV's bankruptcy proceeding. It didn't rehire the hundreds of employees on disability. When MMI Co., a medical consulting and insurance firm in Deerfield, Ill., in 1999 acquired Applied Risk Management Inc. of Oakland, Calif., which administers worker's compensation programs for companies, it only hired ARM employees who weren't on medical or extended leave. Five employees on long-term disability leave weren't hired.
MMI has since been acquired by St. Paul Cos., an insurance concern. A spokeswoman declined to comment. Mitch Hecht, vice president of external affairs at International Steel, says, "It's strictly an arithmetic fact that the profits are not being generated to cover the costs of all the health care programs of workers from the past." The company views the plight of the disabled workers as a tragedy and calls on the government "to come up with a broad solution to fix the problem," Hecht says.
Polaroid began its downward spiral in the mid-1990s, as digital cameras and cheap, one-hour developing ravaged its niche of instant photography. With nearly $1 billion in debt, Polaroid filed for bankruptcy-court protection in October 2001. Nine months later, One Equity Partners, a Bank One investment arm, acquired its assets.
Suing for discrimination
Williams, who has been on disability since 1988 because of her lupus and diabetes, recruited some of her ex-colleagues to hire attorney Harvey Schwartz, who filed a discrimination case last week in federal court in Boston. Polaroid and One Equity "got together and consciously planned to discriminate against people who were receiving" long-term disability benefits, says Schwartz, of Boston. The new Polaroid hired able-bodied workers, but their disabled colleagues "were intentionally not hired because they were disabled," Schwartz added. A spokesman for Polaroid, under One Equity's management, declined to comment on the suit.
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