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Beware promising that benefits are permanent

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in Compensation and Benefits,Human Resources

Here’s something to think about when you revise your handbook or send out an announcement outlining your benefit plan: Be sure to tell workers that benefits can change at any time and that this year’s offering isn’t a promise that the benefits described will continue indefinitely.

Recent case: When a group of retired workers for Orange County saw their share of health insurance premiums increase, they looked for a reason. They discovered that the county had separated retirees from the larger active-employee pool when calculating rates. That meant their older group paid more.

They sued, alleging they had been promised rate pooling for years. But the county won when it showed that every year, it told workers that the pooling arrangement was only for the coming year. (Retired Employees Association v. County of Orange, No. 12-56706, 9th Cir., 2014)

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