'Betrayed is not too strong a word': Dozens of retirees sue University Health, Piedmont

More than 170 retired employees are suing the University Health Services Inc. and Piedmont Healthcare Inc., after learning their lifetime health benefits are no longer guaranteed.

The civil action, filed on March 21 by attorney Jack Long in the Superior Court of Richmond County, states University Health Services Inc., now part of Piedmont Healthcare, promised employees when they reached the age of 65 that they would receive Medicare supplement insurance at no cost if they were employed before Jan. 1, 2005 and had 30 or more years of continuous service.

The agreement was provided in University Heath Services' retirement benefit booklet, according to the lawsuit. The business referred to the benefit as a "hidden paycheck."

Copies of documents containing the promised benefit are included in the lawsuit.

Robert Taylor, former chief financial officer for University Health Services and one of the plaintiffs in the lawsuit, explained the agreement was made in part to keep turnover of employees low.

Taylor noted University Hospital sits right next to the Medical College of Georgia, which is a state institution, and all of their employees participate in the state benefit plan, which includes retirement benefits. He said the medical college offers rich benefits to keep the university competitive.

"[Current leadership] said early on in the discussions that this is an unheard of benefit and it is not reasonable to do this," Taylor said. "At some point, [University Health] leadership said we have to compete with MCG sitting right next door to us, so this is the way we do it. You might not have to do that in Tifton or Savannah – but in Augusta, University Hospital is sitting next to people who compete with you for every type of employee and it can put you at a disadvantage. So it is rational that they offered it."

However, shortly after University Health Services joined Piedmont in March 2022, retirees were notified by the Piedmont Integration Team in September 2022 that the lifetime retiree health benefits would no longer be funded as of the end of 2023 and is now only being paid voluntarily.

"My first reaction was this is a bad thing to do," Taylor said. "It's a promise that was made and a lot of people will be harmed by this. ... We got together a small group to meet and have a cup of coffee. From there, we ran it like we would have a big project at the hospital."

Taylor said they went from a group of three, to a steering committee of 15.

"We created a Facebook page devoted to retirees and began talking about our options," he said. "At the same time we were doing this, we began talking to leadership, sent letters to board members and tried to gather information. ... It seems like the wrong thing to do on a number of levels and it's not like we haven't not reached out and tried to persuade a solution."

Piedmont did not immediately respond to requests for comment on Thursday.

Who is affected?

Taylor said there are about 260 retirees affected and the value of the promise was about $150 per month, per retiree who earned the benefit. Annually, the value comes out to about $1,800.

"For some people, that's not a big deal – for some people, that's a huge burden," he said. "A promise that was made, relied upon and earned is being withdrawn. ... Your emotions can get can get the best of you when you've worked for an organization that long. Betrayed is not too strong a word. Some [former employees] were so angry, they literally weren't rational."

On or about the same date University Health Services made the announcement to stray from the agreement, the lawsuit alleges the business entered into an executive restrictive covenant and severance agreement with its CEO, agreeing to pay a severance of three years' compensation – coming out to more than $5 million.

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Even though Piedmont Healthcare assumed the contractual obligations of University Health Services, it refuses to inform the retirees that it will abide by the obligations of University Health Services and provide the lifetime benefit, according to the suit.

The retirees are asking the court to declare University Health Services and Piedmont Healthcare cannot terminate the contract that they have with each former employee and are obligated to pay for the benefits, according to the lawsuit.

'It's the only job I ever had'

Deborah Mangum, who was University Hospital's first pharmacy intern, is one of the more than 170 retirees joining in on the suit.

"I started with them when I was 19 years old and I retired when I was 55 to keep the insurance," Mangum said. "I always knew University might change the rules, but I never knew them to take away something that they had already given the employees."

At the time of her retirement, Mangum was assistant director.

"I'm not going to lie, I could afford to pay it myself, but there are a lot of individuals who count on this day in and day out," she said. "In fact, people had so much trust in University that I've talked to retirees who received the letter, who said, 'Oh, that doesn't apply to me.' They just can't believe that they would be done this way after so many years of service."

Had she known the benefits would be cut, Mangum said she wouldn't have stayed with the organization.

"I stayed at University for the promises they made me," she said. "We could go somewhere else and make more money, but I stayed for the atmosphere and for the promises."

Just like Mangum, Taylor said he spent his entire professional career at the organization.

"It's the only job I ever had," Taylor said. "I started working there in 1971 and I worked there for 36 years. I've been retired for 16 years and in my situation, benefits have been paid for since I turned 65. ... It's an injustice to 262 people who gave their all for 30 plus years for that organization."

Taylor added the average age of the people who have who have worked 30 or more years is 75, with some people being in their mid 90s.

"It is everyone from custodial folks, to clerical folks, to management folks – but most of the individuals affected worked on an hourly basis, so they were not large salary earners," he said. "There were some of us who were executives who made good salaries and it affects us, too, but it doesn't affect us at the same level that it would somebody who made so much less for many years. It's not the way you're supposed to take care of people who took care of your organization."

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While most look forward to a stress-free, worry-free retirement, University retirees are spending their time fighting for what they thought was guaranteed.

"We have spent quite a bit of time on this," Mangum said. "I'll be honest, I'm angry with Piedmont coming in and taking over University. I never thought that would happen. But as I talked to fellow retirees, and people who are dependent on this benefit, maybe more than I am, that just made me want to fight harder."

Additional individuals may join the action in the future, according to the suit.

This article originally appeared on Augusta Chronicle: More than 170 University Health retirees sue after losing benefits