Verizon plans to suspend strikers' health insurance

Amid a strike that has much to do with healthcare contributions, this move may come as no surprise: Verizon Communications (NYSE: VZ) has warned it 45,000 striking union workers that the company will begin suspending health insurance coverage at the end of August if they do not return to work by then.

Verizon strike Walberg MI

Verizon wireline union workers picket in Michigan on Tuesday. (Photo courtesy of CWA)

Among the biggest contract concession Verizon has been seeking is a new agreement under which union employees would contribute to health insurance plans. Verizon said it warned union members by letter of the possible impending suspension of their healthcare coverage.

The Communications Workers of America (CWA) union appeared not to be surprised by Verizon's latest action, and said it would make healthcare funding assistance available to striking workers through its Robert Lilja Members Relief Fund. The CWA and the International Brotherhood of Electrical Workers (IBEW) also are dispensing advice to members about COBRA coverage.

Meanwhile, much has been made of how the 45,000 striking workers belong to the wireline side of Verizon's business, which suggests that they do not have much negotiating leverage since Verizon has seen almost half of its residential wireline voice customers cut the cord for other options over the last half decade or so. Verizon CEO Lowell McAdam hails from the much healthier wireless side of the business, where union impact traditionally has been scant or nonexistent. However, it should be noted that many of the union wireline workers also work on the telco's highly successful FiOS broadband and TV efforts, the company's main lines of defense against the cable TV companies that in many instances are stealing its legacy wireline voice customers.

By initial appearance, it would seem that Verizon has much of the leverage in this fight, with a declining business unit and a wholesale move by corporate America away from benefits like full company-funded pensions and healthcare. However, if the strike weakens the ability of Verizon to maintain its broadband reliability, leverage may swing the way of the workers.

For more:
- see this CNET article
- CWA has this healthcare FAQ for striking workers

Special Report: Verizon Strike: Full coverage

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