How many of you out there have seen Michael Moore's new film, Capitalism: A Love Story? It is pretty decent and as usual maddening. I say maddening because as most of you know, Moore always shows you scenes that literally make you want to scream in rage. Well I learned something new. I learned about "Dead Peasant Insurance". If you haven't seen the film, you are probably wondering what I'm talking about. I'm talking about Corporate-Owned Life Insurance policies. I'm not going to recite all of the details of said insurance. You can just go to Wikipedia like I did. If you don't have the patience for that I'll give you a brief synopsis. Back in the day companies began taking out life insurance policies on their key personnel or executives. The idea was that if one of these individuals were to suddenly die, the company would be at a loss and should be able to insure themselves from such an accident. Later on, companies began to take out insurance policies on non-key employees, AKA "Peasants". They could do this without an employee's knowledge until 2006. The Winn Dixie chain took out 36,000 of these policies and they became referred to as "Dead Peasant Policies" in internal memos between the chain and it's insurer.
To get a clearer picture let's call you Billy Bob Doe and it's the year 2005. You work at Bank of America as a teller. Than you die. Your whole family is sad. "I miss Billy Bob" is the general sentiment at your funeral. Now the fam is having a hard time because they counted on you to bring home the Tofu. Your funeral costs a few bucks and the whole family is in a big hole, after all you didn't take out a life insurance policy. So your wife and kids are actually in debt for tens of thousands of dollars while simultaneously coping with the loss of you. Whose going to bring little Eloise Bob and Alloisius Bob to their soccer games, now that mom (Maria Bob) has to work two jobs? In the meantime an insurance company is in the process of cutting a check for say $1,000,000 to give to Bank of America to compensate them for your loss. And the best part is your family will never know.
Since 2006 companies have been required to get permission from the employee before taking out a policy. Imagine filling out a bunch of papers for your employment and you don't realize you are signing permission to allow your employer to take out an insurance policy in your name, that your family will never get money for. And according to Houston-based attorney Michael Myers (not from SNL or Halloween), businesses often skip that step altogether. In the movie Capitalism, Michael Moore points out that individuals without health insurance die on average, 3-5 years earlier than those that are insured. So if you are a company like Wal-Mart that has over 1.5 million employees, it's in your best interest not to offer health coverage to your employees because they will die sooner and you will get paid more money.
How on earth did I not know about this? Tell me people. I know I shouldn't be surprised, after all our economic system has never cared about the average Billy Bob Doe, and has always done every sneaky underhanded trick in the book to squeeze a dollar from the lifeblood of every Billy and Maria they can find. It just amazes me that with all of the so-called "progress" this country has made, that companies can actually reach a new low in this millennium.
And if the company just happens to have dangerous, unhealthy working conditions, all the better for them...
ReplyDeleteOr maybe the employer and the insurance company had a deal (it's called "experience rating") that precluded the employer from making any money on employee deaths.
ReplyDeleteAll of the gain from these plans came from tax avoidance. You can rail about that if you like, but the fact remains that the longer the employees lived, the MORE the company made on their policies.