Retiree Healthcare

eolesen

Veteran
Jul 23, 2003
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Universal Changes: Medical Coverage for Active Employees When They Retire

Our Approach
American is seeking to align the benefits available to employees when they retire with those offered by other airlines and large corporations.

Cost Savings Goals
American’s successful restructuring, and its very survival, requires us to re-think every aspect of our business. Benefit costs represent a significant portion of AA’s competitive disadvantage.

Only 25 percent or fewer of U.S. employers now provide employer-paid retiree medical benefits. American will no longer subsidize this benefit, but will continue to provide access to retiree medical coverage for retirees who choose to pay for the benefit.

Note: Current retirees are not part of these changes. Their retiree medical benefits will be addressed separately.

Summary of Changes
Current employees will still have access to retiree medical coverage, whether they retire before or after age 65.

However, employees will no longer prefund their retiree medical costs, but will instead move to a post-funding model to better align American with the industry and corporate America. This means retirees will pay for their retiree medical coverage at the time they are using it, instead of putting money into a company-sponsored retiree medical trust while they are working.

Employee Prefunding
Employees who have prefunded their retiree medical coverage, but have not previously received their prefunding balance, will get their money back, plus investment earnings.

Employees Retiring Before Age 65
Early retirees will be offered access to a company-sponsored retiree medical option. The retiree will pay the full cost of the projected annual expenses, including administrative expenses.

For 2012, employees will be offered the same Pre-65 plan design as offered to management. The current cost for a retiree enrolled in the Retiree Standard Medical Plan is $462 per participant per month.

Though American intends to continue offering employees access to making Pre-65 coverage, we reserve the right to modify, amend or terminate the plan at any time.

Employees Retiring at Age 65 and Over
Retirees will be offered access to Medicare supplement plans through a third-party administrator, to the extent available. These plans will be “guaranteed-issue,” which means any retiree will be eligible, regardless of the age they enter or any pre-existing health condition.

Medicare supplement plans offer more choices, flexibility and coverage than the current Post-65 American plan. These plans are offered by numerous insurance companies, with costs based on the location of the retiree and the level of coverage needed.
 
If this T/A were to pass, we would be leaving alot of money on the table.

Bob Owens - Vote No Video
 
Dave, it's getting old... can you find a few more quotes to keep recycling?...
 
Employee Prefunding
Employees who have prefunded their retiree medical coverage, but have not previously received their prefunding balance, will get their money back, plus investment earnings.
Wonder if that includes the company match that Bob Owens was certain belongs to the employees?