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Paramount Cards left workers without pay, higher health-care costs(Providence Journal, The (RI) (KRT) Via Thomson Dialog NewsEdge) Sep. 17--Barbara Thornhill figured she got lucky when Paramount Cards last year began laying off hundreds of workers -- and she was spared. So did Gary McCluskey, who designed greeting cards, and Patricia Hereth, who processed card orders. They no longer feel lucky. On July 21, just shy of the company's 100th anniversary, Paramount closed its doors. Unable to reach an agreement with its lenders and investors for more money, and too short of cash to make payroll, Paramount's main lender, Citizens Bank, petitioned a Superior Court judge to place the company in state receivership. Paramount's closing stranded more than 1,200 employees, including 127 at its Pawtucket headquarters and 550 in Canada. There was no severance pay, no vacation pay and no company-financed health insurance. "You feel badly," said the company's former vice president of human resources, Lori A. Searles. "We let 240 people go (earlier) with packages ... and they landed softly." "This," she said, "was a hard close." Don't ask Barbara Thornhill about retiring. She's not ready. At 60, she is blond and trim, with milky skin and a bounce in her step. She loves eating Thai food and seeing shows at the Providence Performing Arts Center. And just last week, she painted her bathroom and the pantry. For the first time in 32 years, Thornhill is unemployed. She lost her $12.60-an-hour job, where she most recently worked in the stock control room, when the company went into receivership. "I love my job," she said, slipping into the present tense, "so, no reason to retire early." She'd planned to work another six years, until she turned 66. "Now, I don't know," she said. Unemployment pays $256 a week -- enough to cover the $95-a-week rent on her apartment in her brother's house and keep food on the table, but not much more. Her only dependent is her cat, Squire. She won't be eligible for Social Security for another two years. She has health coverage through the company's Blue Cross Extended Benefits Plan, for $311 a month. "I just got a bill for $623," she said, for her coverage as of Aug. 1. "I'm going to have to take this out of my savings." Her gross income last year was about $24,000. "I just got very comfortable there," she said of her former employer. "I think that's what happened to a lot of us. We just got comfortable there." She sent out her resume to a hospital, an insurance company and a printing company. "I haven't even been called for an interview," she said. In the meantime, she plans to do more painting. Next is the living room. "I never painted before in my life but it came out pretty good," she said, cheerfully. "Maybe I should be a painter!" When the small auto body shop in Pawtucket where Patricia Hereth's husband, Stephen, works as a mechanic dropped its employee health benefits in 2003, Patricia figured the family could get by for a while with no coverage. But after 11/2 years with no health insurance -- and a $1,500 hospital bill that they were paying off in monthly installments -- Patricia Hereth decided that she needed to find a job with benefits. So when Paramount Cards asked her to go full-time, she was happy to do it. "I needed the health coverage," she said. The job processing card orders paid $11.95 an hour. It also came with a Blue Cross family plan for the Hereths and their two children, now 14 and 21. Their household income last year was about $60,000, she said. Now, the card maker is closed and Patricia Hereth said that they can't afford to pay $732 a month for the Extended Benefits program. So except for her 14-year-old son, who she expects will qualify for coverage under the state subsidized benefits through RIte Care or RIte Share, their family has no health insurance. "We're right at middle class, where we can't get anything," said Patricia Hereth."We own a home. We have bills." The Hereth's also recently paid about $5,000 to settle a claim against Stephen Hereth by the Recording Industry Association of America as part of a federal lawsuit filed against more than 18,000 people nationwide, including 108 in Rhode Island, alleging copyright infringement for downloading and/or distributing music. "We have a home-equity loan of $35,000," Patricia Hereth said. "That's like $340 a month, and my mortgage is like $900. I could not have take on another $800 for the health care. That would just put us under." She started working at Paramount 30 years ago, when she was in high school. Now, she spends her days looking for jobs online and working on her resume and cover letters. "I'm 47, my husband's 50," she said, "You never know what's going to happen in life. . . . Knock on wood, we're all healthy." Gary McCluskey used to save for retirement. Not anymore. After he lost his job at Paramount two months ago, McCluskey, 44, whose wife, Susan, 42, is a student, cashed in his company 401(k) plan to pay for their health insurance. "You don't want to have to do things like that, but when you see there's no other way around it," McCluskey said. "We're not young anymore so we don't want to go without (insurance)." McCluskey had thought it was only temporary. He figured that because former Paramount Cards employees' jobs had gone overseas -- and they qualified for benefits under the federal Trade Adjustment Act -- that he would be eligible for a federal tax reimbursement program that would pay up to 65 percent of his health coverage. But he has since learned that Paramount's group plan under Rhode Island's Extended Benefits program is not eligible for the federal Health Coverage Tax Credit. "A lot of people think, 'we can tough this out for a month or so and then get 65 percent' " back, McCluskey said. "But that's not gonna happen." Paramount employees who want to apply for the federal tax credit have until Oct. 1 to switch to a Blue Cross Direct Pay Plan, where they buy their benefits directly from Blue Cross, said company spokeswoman, Kimberly Keough That may or may not be cheaper. It's up to the individual subscriber, Keough said, to "do the math." The same health coverage that McCluskey said he used to get from Paramount for about $260 a month now costs about $732 a month. McCluskey forked over the money for August, and then switched to a reduced-coverage plan available through his wife's college. The couple bought a house in Pawtucket three years ago and have a 30-year mortgage. "Right now we're covering our bills," he said, "but just barely." The other day, McCluskey said, he called to cancel their cable-TV subscription. The person on the phone asked why, and he told him. The man offered to temporarily cut their cable payments by more than half, and keep the service. He thought that was nice. To see more of the The Providence Journal, or to subscribe to the newspaper, go to http://www.projo.com. Copyright (c) 2006, The Providence Journal, R.I. Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |