By Shannon Joyce Neal 
Dayton Daily News 

DAYTON | NCR Corp. retirees who do not qualify for Medicare will have to pay much more for their medical insurance next year, the company confirmed this week. 

The change is part of a companywide effort to cut $250 million in operating expenses by the end of 2005, NCR President and Chief Executive Mark Hurd said in an Oct. 10 letter to retirees. It also includes the elimination of company paid life insurance for both employees and retirees. 

Retirees age 64 and younger will begin paying a monthly premium for their medical benefits in 2004. The change affects 3,500 of the company's 14,000 U.S. retirees, NCR spokesman John Hourigan said. 

The cost will be phased in over two years to allow retirees to adjust their budgets, Hourigan said. For a single retiree, medical benefits are expected to cost $107 a month in 2004 and $300 a month in 2005, Hourigan said. Coverage for an employee and spouse will cost $231 in 2004 and $600 in 2005. 

NCR said it will deduct the added payment from each retiree's monthly pension benefit. If the added cost exceeds the monthly pension benefit, NCR said it will bill each retiree directly for the difference. 

NCR retirees Carolyn and Dick Powell said they currently pay about $80 a month for medical benefits, and the increase will force them to go back to work full time. They both retired in 2000 at age 55 after three decades with the company rather than lose their jobs through layoffs. They gave up 18 months of unemployment to take the retirement, Carolyn Powell said, in order to keep their medical benefits. 

"I appreciate the notice because we're going to need to do something," Carolyn Powell said. In the past, their NCR pensions have covered their mortgage, utilities and other expenses. They worked part-time, she said, but thought they were financially safe. Now at 59, they're looking for full-time work to cover the increase. 

The Powells had a $100,000 life insurance policy through the company, Carolyn Powell said, and now worry what will happen to that coverage. She's a diabetic and he has heart arrhythmia, making life insurance difficult to find. 

The letter states that company-paid life insurance for retirees ends Dec. 3. Hourigan said employees and retirees will have the option of starting a traditional life insurance policy with a private company. 

Pension benefits will not change, Hourigan said, and medical benefits for retirees age 65 and older will remain the same. 

NCR announced last year that it planned to cut jobs, trim costs and streamline operations in an effort to make the company more competitive. Hourigan said the process isn't limited to one part of the company or its operations. 

"We know this is a difficult process," Hourigan said. The decision to start having retirees pay for their medical benefits came after looking at the way other companies handled the same benefits. Health insurance isn't a vested benefit, Hourigan said, and the company can make changes to what it provides and how much it costs. 

NCR employees started paying for a portion of their medical benefits in 1999. That same year, the company dropped supplemental Medicare coverage for employees under 64 who had not yet retired. 

Contact Shannon Joyce Neal at 225-2436. 

[From the Dayton Daily News: 10.16.2003]