PITTSBURGH-The United Steelworkers of America is warning former employees and retirees of defunct steelmaker LTV Corp. that a voluntary employees' beneficiary association established to provide them with health insurance is not endorsed by the union.

Americana Financial/NEBCO announced earlier this month that it would administer a VEBA, which allows tax-deductible money to be set aside for employee health and other benefits, on behalf of former and retired LTV workers (BI, April 22).

In an April 19 letter sent to Americana, the union asks for detailed information about the VEBA, including copies of all plan documents, the names of the former LTV workers who established the VEBA, and the methodology used to set payments for medical coverage under the plan, called Steelworkers Benefits Plus.

"In our view, this is, at best, a very mediocre product, and that's why we want our retirees to know that the Steelworkers Union has had absolutely nothing to do with it," Leo W. Gerard, international president of United Steelworkers, said in a statement.

One of the concerns expressed by Mr. Gerard involved the similarities between the VEBA's logo and that of the union.

"I'm outraged that the promotion materials use words and symbols that would cause a retiree to believe that this is an offering that has something to do with our union. Any attempt to mislead our retirees will be challenged with the full resources of our union.

"The workers and retirees of liquidated companies have had their health benefits wiped out at the most vulnerable time in their lives. We'll never allow them to be misled by schemes that take advantage of their desperate need to maintain their dignity and well-being," Mr. Gerard said.

Samuel H. Fleet, Americana's Warwick, R.I.-based president and chief executive officer, said the company's attorneys are examining the letter and will respond in time.

"We feel very good about the plan we're offering. We feel it's actuarially sound. We feel we're providing a program that is affordable and provides a level of benefits" commensurate with on that affordability, Mr. Fleet said.

While acknowledging that the benefits it offers are limited, he noted that it is designed to be affordable. "Not everybody needs a Cadillac program," and the VEBA fits the needs of the "vast majority" of the displaced workers, he said.

The VEBA offers up to $1 million in lifetime coverage, with a $50,000 annual maximum. There is also a $25,000 inpatient and a $5,000 outpatient annual limit for immune system, cardiovascular and cancer-related disorders. The VEBA also will offer dental, life and critical-illness benefits.

Mr. Fleet also said that Americana has complied with the union's demand and changed the logo of the plan's name on the Americana Web site so that it no longer resembles the union's logo. In line with the union's demand, the Web site also now carries a disclaimer that the VEBA is neither sponsored by nor affiliated with the union.

A United Steelworkers spokesman said those changes are "a step in the right direction." Nonetheless, he said, "we still have serious questions about the quality of the coverage."

The VEBA, which takes effect May 1 and is open to both former union and salaried workers, will be self-insured for former employees. Retirees will be covered by an insurer yet to be announced.

About 10,000 to 20,000 former LTV workers and retirees are expected to participate, said Mr. Fleet, who added that the initial response to the VEBA has been good.