Bermuda Telephone Company will no longer bear the risk of large insurance claims for its retirees after deeming the chance of massive payouts too great.

Some retirees have expressed anger at the switch to alternatives such as Argus or Government's Health Insurance Plan — but BTC will continue to contribute to health care costs under a new system.

For many years, the risk of claims exceeding premium contributions has been borne by BTC. However, BTC director Sheila Lines wrote in a letter to the firm's 100 or so retirees: "For many years BTC has made a health-care plan available to its retirees.

"Effective March 31, 2009, BTC will no longer be offering the current BTC health plan to its retirees. Prudent fiscal management demands that BTC can no longer absorb the risk of insuring its employees (which extends to its retirees) and must turn this task over to a professional health insurance company.

"As you can appreciate, BTC is a telecommunications company — not an insurer."

Employees still working will not be affected because they are covered under the new group plan. Health care provider Argus has been enlisted to provide alternative health insurance options for retirees insured under the current plan.

HIP and Argus have both offered an open enrolment window in which retirees will not need to show evidence of insurability to qualify for benefits, while cover will be available regardless of state of health.

Mrs. Lines told The Royal Gazette under the old system the company paid on average $185 toward each retiree's premium. Under the new system, it will provide a contribution of $225.

Retirees have told this newspaper tempers ran high when the plan was announced, with information workshops on the subject earlier this week said to be fiery.

Mrs. Lines, who is also CEO of BTC's parent company Keytech, said: "Health care is a very emotional subject. People don't want change. Monday's workshop was pretty highly charged emotionally. Tuesday's was quite different; retirees were much more focused on asking questions.

"I understand they are angry; I know they are angry. We are continuing our financial obligation; we simply can't continue to act as insurer.

"Retirees need to make sure that they get the information that the insurance companies are giving. Make sure you make a good decision. If there's a word of advice, they need to pay very careful attention to what the different plans offer and make the right choice."

Mrs. Lines stressed the move was not a cost-saving measure, but would protect against the company being hit by potentially huge unforeseen payouts.

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