Retired NFL Hall of Famers Demand Lifetime Health Insurance and Annual Salaries

Every football season, I look forward to becoming a couch potato on Sundays. But a fierce battle is brewing off the gridiron that I feel compelled to weigh in on.

A group of National Football League Hall of Famers recently threatened to boycott future induction ceremonies unless the NFL agrees to their demand for lifetime health insurance coverage and an annual salary, even though they’re retired. They also want to obtain health insurance and a better pension for active players.

Leading the effort is legendary running back Eric Dickerson, who believes all 318 inductees should receive roughly $300,000 a year, which would total $95.4 million. The Hall of Fame Board (HOFB) argues that it’s a drop in the bucket given the league’s more than $14 billion profit in 2017.

Some players who are enshrined in Canton, Ohio have died, including those with a history of repetitive brain trauma known as chronic traumatic encephalopathy or CTE. In those cases, their heirs could reap any sweetened benefits. The widow of elite defensive end Reggie White, a member of the HOFB, expects the additional benefits and compensation being sought will extend into a post-mortem phase. 

At first, I wasn’t sure how to react to this movement. So I did some research and figured the numbers would shape my view. A Society of Actuaries report found that the NFL pension plan’s 78% funding level, based on $2 billion in assets against projected benefit liabilities of $2.6 billion, is less than the multiemployer industry average of 85%. While various reports indicate that the NFL’s plan is better than the National Basketball Association’s pension, which is funded at just 61%, it pales in comparison to Major League Baseball at 90% and the National Hockey League at a surprising 135%.

One reason cited for the NFL pension’s $600 million shortfall is a player lock-out in 2011 and negotiation of a collective bargaining agreement (CBA) that includes a significant increase in pension benefits for retired players and runs through post-season 2020. That’s when the NFL will celebrate it is 100th anniversary – a critical piece of the puzzle I’ll get to later.

Despite large salaries for high-profile players, the average annual pension was $43,000 in 2014 – the latest number available. The average career of an NFL player, who becomes fully vested in the plan after three years on active roster or injured reserve status, is just four years. The benefit amount is based on the number of credited seasons played.

An NFL pension plan was created in 1959 and supplemented in 1993 by a 401(k) plan to which players contribute and again in 1998 with an annuity program. Pension benefits have been increased three times for former players since 2011.

In acknowledging the role of pre-1993 players, a so-called legacy fund was established under the current CBA with team owners for the first time funding a $620 million increase in benefits from their share of revenues.

In a letter to the NFL, an impassioned Dickerson’s wrote that “the total cost for every Hall of Famer to have health insurance is less than $4 million – less than that of a 30-second Super Bowl ad, or about 3 cents for every $100 the league generates in revenue.” As for paying HOF inductees an annual salary, he added that it “works out to about 40 cents for every $100 in annual revenue, a figure that will increase dramatically in the near future with legalized gambling.”

While the CBA doesn’t include lifetime health insurance, NFL insiders have suggested that a deal on this issue is within reach between HOFB pressure and the looming centennial celebration that no doubt will offer a tip of the cap to football greats. The average annual health insurance premium is now more than $5,700, though obviously it will be higher for former players who have various health issues. Affording coverage, of course, boils down to how well each member of the HOF managed his money.

One staunch critic noted that the proposal “reeks of selfishness,” comparing it to the formation of the NFL Quarterback Club that once divided players and arguing that it should include all retired players – not just the ones who don gold jackets.

I completely agree with that assessment, especially since Hall of Famers are in a much better position to capitalize on their name recognition in the free market and earn decent money in retirement through special appearances. Rather than asking for an annual salary, which flies in the face of the idea of retirement, it makes more sense to seek incremental improvements to their three retirement savings vehicles.

As for the HOFB seeking lifetime health insurance, that makes total sense to me. It’s a promise made to many public-sector employees, which is why those jobs have become so sought after in recent years. In stark contrast, private enterprise began slashing retiree health care benefits since I began writing about employee benefits 30 years ago.

The trouble, however, is that city, county, state and federal governments have long been on the hook for unfunded pension and retiree health care benefit liabilities – a terrible burden that all taxpayers must shoulder. If the NFL continues to grow and meet its ambitious revenue targets, then lifetime health insurance coverage probably wouldn’t make much of a dent in the bottom line. The HOFB also could work closely with the players union to include these demands in the next CBA.

But in all fairness to the NFL, I keep hearing anecdotal evidence to suggest that the league could be in big trouble in the years ahead.

For starters, the concussion issue has caused countless parents to pass on football for their sons (and possibly daughters in some cases). I heard one sports talk show host speculate that only hardened criminals or burly men desperate for cash would dare compete in an NFL of the future. Most young people already have lost interest in baseball, so it’s possible that also could happen with football on a professional level.

We all are well acquainted with how the NFL ratings tanked following the controversy over some players taking a knee during the national anthem, which alienated scores of die-hard fans. And with the NBA becoming increasingly popular, the bloom may stay off the rose for the NFL long term.
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Either way, I think anyone – even those who are not football fans – can relate to the humanity and real-world issues associated with this story. And I hope there’s a happy outcome for everyone involved.