Verizon proposes health-benefit deal


NEW YORK - Verizon Communications Inc., the nation's largest regional phone company, asked union employees to shoulder more of their health care costs in exchange for a promise that it wouldn't lay off workers until late 2004.

Verizon made the offers in contract talks with two unions representing 78,000 Verizon workers from Virginia to Maine, according to a letter sent this week by Verizon Chief Executive Officer Ivan G. Seidenberg to U.S. senators and obtained by Bloomberg News.

The document offers a glimpse into negotiations that started mid-June and have remained largely under wraps.

Verizon wants to contain $1 billion in annual health-care expenses. It also wants more flexibility in moving and cutting jobs as it loses local phone customers to competitors, some of whom lease its network at wholesale prices.

"This combination of a higher cost structure and forced subsidies has put us at an extreme disadvantage versus any of our nonunion competitors," Seidenberg wrote in the Aug. 19 letter.

The correspondence appeared to violate a directive by federal mediator Peter Hurtgen, who asked both sides not to disseminate information on the talks, said the Communications Workers of America and the International Brotherhood of Electrical Workers in an e-mail to their members.

Seidenberg "undoubtedly knew that the specifics in the letter would be given out in work locations in an effort to confuse our members and influence the course of bargaining," the unions' statement said. CWA spokeswoman Candice Johnson declined to comment further.

The letter was intended for Verizon senior managers and the senators, and not for external distribution, Verizon spokesman Eric Rabe said. He declined to discuss its contents.

Verizon's proposal included "modest increases in some deductibles and co-pays" in the health plan and a continuation of the plan for active employees and retirees for five years, according to the letter.

If the plan is accepted, union-represented employees would pay about 7 percent of their health-care costs, Seidenberg wrote. Under the current contracts, which expired Aug. 3, workers pay about 5 percent of their health expenses. Costs for employee doctor bills and other medical expenses increased about 12 percent last year, the company has said.

The letter said Verizon offered no layoffs until October 2004; a provision to "keep jobs local" for five years; a lump-sum signing bonus; a provision to negotiate future wage increases; and an increase in the contribution for retiree health care to $21,000 from $11,400.

The unions started a Web site earlier this month to collect names of members and their families who'd be willing to switch phone service to AT&T; Corp., a Verizon competitor, if union leaders say it's warranted.

Seidenberg wrote that he sent his letter in response to a letter he received from several senators who said they were "troubled" by possible job losses and higher health-care expenses for their constituents. The senators included three Democrats: Barbara A. Mikulski of Maryland, Edward M. Kennedy of Massachusetts and Hillary Rodham Clinton of New York.

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