Railroad National Health Plan Update

Employee Contributions Under National Health Plan

Reduced to $198 Through June, 2016

Employees working on railroads covered by the national contract will see their monthly cost-sharing contribution reduced from $200 to $198 on July 1, 2012. The contribution rate will remain fixed at $198 until July, 2016, at which time it can go up to no higher than $230.

The reduction in the monthly contribution was agreed to at a March 29 meeting of the CRLO, an organization of all the rail unions led by TCU President Robert Scardelletti, and the National Railway Labor Conference representing all the railroads in national handling. The meeting was to determine the estimated monthly cost of the national health plan for 2012, based on last year’s plan experience, estimated trends of plan costs going forward, and reserve amounts. Based on the data provided by the Plan administrator, United HealthCare, and the other insurance vendors, it was agreed that the carriers would pay more than $1,300 per month per employee, and that, in turn, the employee contribution amount would drop to $198.

Under the terms of the just ratified national contract, the employee monthly contribution could not be more than $200, but could be less if the overall payment rate warranted. Another provision of the national contract provided that the rate arrived at in 2012, whether $200 or less, would remain in place through June, 2016, even though plan costs are expected to rise every year.

“All the rail unions are pleased that the frozen employee contribution amount will be slightly less than the $200 we expected when we distributed the ratification material,” says TCU President Scardelletti. “While $2 a month may not sound like much, it represents an overall savings to rail union members covered by the national contracts of about fourteen million dollars over the four years.”