FairPoint to end health care benefits for strikers

increase font size

FairPoint Communications will stop providing health care benefits for its striking workers after Friday, ratcheting up the pressure in the contentious two-week-old walkout.

Several workers on the picket line Thursday outside the telecommunications company's headquarters in Portland said they received company notices that they would no longer have health insurance after Oct. 31, but would be eligible for benefits under COBRA, the federally mandated continuation of health care coverage.

Union leadership said the move was expected; a similar tactic was used by a different telecom company during a strike in Hawaii that brought that walkout to an end in 2011.

Pete McLaughlin, business manager of the International Brotherhood of Electrical Workers Local 2327 in Augusta, said the action will create hardship for some of its members who may not have other options for health insurance.

'I think that's what the company is planning on. ... It's a tactic that companies use in these instances when there are people on strike - they cut off health care, send out COBRA notices. They're designed to put pressure on people. That's not a secret,' McLaughlin said.

Angelynne Beaudry, FairPoint's spokeswoman, confirmed Thursday that the company would allow health insurance for striking employees to lapse at the end of the month. She said that's how the health care plan works.

'They're not working for the company. They're on strike,' she said. 'Most benefits, including medical coverage, require a minimum number of scheduled work hours to maintain eligibility. So when union members went on strike they became ineligible under the plan.'

She wouldn't address whether it was a company negotiating tactic.

'I'm not saying whether it is or isn't,' Beaudry said, repeating the eligibility rules for the benefits plan. 'The plan dictates that it's such.'

The action was greeted with grim resolve by striking employees, who have worked without a contract since August. Negotiations with FairPoint on a new contract with the IBEW and the Communications Workers of America started in April, but ended without a resolution. Roughly 800 employees in Maine went on strike at midnight Oct. 16 along with 1,200 FairPoint employees in Vermont and New Hampshire.

Julie Dawkins, a Gray resident who has worked as an administrative assistant at FairPoint for 21 years, received her COBRA notice Wednesday. She said it came as a shock even though her union, a local chapter of the IBEW, had warned that it could happen.

'I'm not surprised they did it, but it's devastating that they actually did,' Dawkins said.

Married with two daughters in high school, Dawkins worries about the cost of maintaining health coverage. Both daughters are athletes who have racked up plenty of sprained ankles and fractured bones over the years. The family could change to a plan offered by her husband's employer, but it would cost $900 a month for coverage inferior to what FairPoint offers.

'I'm not sure if we have much choice, but it will be devastating to our budget,' Dawkins said. 'I'm just hoping and praying for good health for all of us.'

Kim Phillips, a Portland resident who has worked in the company's wholesale department for 17 years, doesn't know what she's going to do. She's single with a son in high school who just tore a knee ligament playing football.

'So we know there will be a lot of physical therapy for a few months that will have to come out of my pocket,' she said.

She expects to pay between $800 and $1,000 a month to continue her coverage under COBRA. She said she'll need to figure out if paying out of pocket for her son's medical bills will cost more or less than the COBRA premium.

'I have to figure something out,' she said before stepping back into the picket line.

The costs of employee benefits were at the crux of the negotiations. Under the unions' former contracts, the company paid 100 percent of an employee's health care premiums and provided a defined-benefit pension plan and a 401(k) with a company match.

The company has asked for $700 million in concessions, mostly by freezing pensions, eliminating health coverage for retirees and asking employees to contribute roughly 20 percent to their health care costs. In late August, the company claimed the parties had reached an impasse, a technical term in labor law that allows the company to impose its final proposal on the unions.

The unions understand that the company needs to cut costs and have proposed contracts that would trim more than $200 million from employee benefits, but the company has rejected those proposals, said McLaughlin, one of the unions' lead negotiators.

Barry Sine, a financial analyst who covers the telecommunications industry for Drexel Hamilton in New York, called the COBRA notices 'a pretty big weapon in management's arsenal.' He said they could have an impact on the unions' ability to prevent members from crossing the picket line.

In 2011, employees of Hawaii Telecom, a former Verizon company, went on strike under similar labor conditions to those in northern New England. That strike, also by IBEW members, lasted only two days, partly because some union workers began crossing the picket line after receiving COBRA notices that would require a family to pay $3,000 a month to maintain coverage, Sine said.

'Once that happens you tend to have pretty heated discussions in the houses of union members over what will happen now to the family's health care,' Sine said. 'That's where you might tend to see some members cross the picket line instead of losing health care.'

Alec Newcomb, who has worked as a customer service representative at FairPoint for more than five years, is feeling that pressure. He estimates that the cost under COBRA of maintaining health care benefits for himself, his wife and 3-week-old baby would be between $1,500 and $3,000 a month. They have an opportunity to transition to his wife's plan, but there's a 30-day waiting period, which means they wouldn't be covered until December.

Newcomb, a member of the CWA Local 1400, has been saving money for the past year in anticipation of the strike and is determined to see it through to the end, but even so, he's worried.

'I'd like to think I'm smart when it comes to money, but a $3,000 hit for one month of health care? That's a huge hit to my budget,' Newcomb said. 'I have no idea where the money's going to come from.'

Despite Sine's predictions that the COBRA notices may pressure some strikers to head back to work, McLaughlin doesn't believe any will cross the picket line in Maine. Don Trementozzi, president of CWA Local 1400, said the AFL-CIO and national CWA and IBEW unions are mobilizing to provide support and finances to the unions in northern New England.

On Oct. 24, the local unions also created their own relief fund on the website www.gofundme.com. As of Thursday afternoon, the campaign had raised $2,000 of a $50,000 goal.

'We're going to do whatever it takes to take care of every one of our members and pay COBRA for anyone with catastrophic illness,' Trementozzi said. 'We're not going to leave anyone out there standing alone. We're going to bring this company back to the table whether they like it or not.'