PORTLAND – About 400 Maine Medical Center employees have until mid-August to decide whether to accept early retirement buyouts.
Hospital officials are touting the buyouts as a humane way to help alleviate the hospital’s financial problems. Maine Med, which has three campuses and about 6,000 employees, has been operating with a hiring freeze since this spring.
The parameters of the buyout proposal were confirmed to the Portland Press Herald on Tuesday by the hospital’s human resources department.
According to the terms of the offer, employees age 62 or older by Sept. 30 can receive one week of pay for every year of service, capped at 12 weeks of pay, with a minimum payout of two weeks.
Those accepting the buyout must retire by Oct. 1.
Also, any new retirees not eligible for Medicare can purchase health insurance from Maine Med. Those eligible for Medicare will receive a one-time lump-sum payment of $3,800, in addition to severance checks.
Matt Paul, Maine Med’s communications director, said it’s too early to tell what the financial implications of the buyout will be, since it depends on how many people accept one. The hospital previously announced a $13.4 million operating loss halfway through its 2012-13 fiscal year, which ends Sept. 30.
Paul said the early retirement package came about in part because of employee input.
“This was a suggestion by our employees, and it came up a number of times,” Paul said. “We put together a program that’s the right size for our organization.”
As for persistent rumors that the hospital may lay off employees, Paul said layoffs are not in the plans.
“We’re building a (2013-14) budget without making further reductions in our work force,” he said.
Richard Petersen, CEO and president of Maine Med, wrote in a memo to employees in June that “layoffs are a last resort and we’re doing all we can to minimize reductions in our work force.”
Petersen’s memo also referred to increases in free care and bad debt, estimated to cost the hospital an estimated $15 million by the end of the fiscal year. The free care and bad debt expenses could have been alleviated had the state approved Medicaid expansion under the Affordable Care Act, hospital officials have said. Gov. Paul LePage vetoed the expansion, and the Legislature failed to override the veto.
Joe Lawlor can be contacted at 791-6376 or at: