Airtran Insurance question

[tubelcane]

My last company had over 1200 pilots well over 3/4 of the company. I just don't get it, I know healthcare has gotten out of hand, but we should be able to get much better, with 8000 + employees.

 

[IdRtherBsailing]

I know at my last company for the longest time we had awesome insurance. I paid 150/mo for family coverage. Then it was changed. Apparently the company was paying 85% and the pilots were paying 15%. It was changed to the company paying 75% and the pilots paying 25%. Just that little 10% jump doubled my monthly premiums. So when I left I was paying almost 300/mo for a family. From what it sounds like with AirTran, It sounds like the company is not footing much of the bill. The national average Believe is 75/25 Company/employee. It looks like your company is only covering 60-65%. I am not a Rocket Surgeon but I would think you could negotiate that a little better for all of you.

 

[CitationLover]

I know at my last company for the longest time we had awesome insurance. I paid 150/mo for family coverage. Then it was changed. Apparently the company was paying 85% and the pilots were paying 15%. It was changed to the company paying 75% and the pilots paying 25%. Just that little 10% jump doubled my monthly premiums. So when I left I was paying almost 300/mo for a family. From what it sounds like with AirTran, It sounds like the company is not footing much of the bill. The national average Believe is 75/25 Company/employee. It looks like your company is only covering 60-65%. I am not a Rocket Surgeon but I would think you could negotiate that a little better for all of you.

perhaps we could see the air tran plans. typically in network is 90/10 (or $20 copay) and out of network is 80/20 or 75/25 for an hmo.

 

[Steeler Fan]

Read a little closer. The TA allows the company to raise (without limit) the copays one time during the duration of the contract.

So, pay over $450/month and then get much larger payments at the doc's office. What a deal.....

In reference to your post on health coverage. I actually asked Allen to elaborate on this bullet point, then when I read the actual TA language, there was NOTHING there that supported this. In other words, if you think it's bad, it may actually be much worse!

Reference para 12.A.9 - of the actual TA (no, I'm not going to post it here).

The NPA has claimed that the Company can only increase CO-Pays ONCE for the duration of the contract. There is NO reference anywhere in the contract nor is there reference to a side letter referred to in the NPA Bullet Points which supports this claim.

What's really frustrating is the disconnect between what the NPA says this contract does versus what the language actually says. *The vast majority of us who been here awhile really want to see this place succeed long term, but not at the expense of the pilot group. *For newer AirTran pilots, and future AirTran pilots, I'm not alone in saying that we want you to have a job worth having here, with protections that will keep you from having an ulcer out of concern for "what happens if?".

Like I said before, I genuinely believe that AirTran can be a PHENOMENAL airline, and I think this contract can go a long way in helping all of us get there--but we're not there yet.

 

[Lear70]

Hey Steeler Fan, that line about the co-pays looks strangely familiar...

Sorry guys, don't get on the LCC side of the forum except maybe once a week,,,

NONE of what follows was garnered from my work with the NPA on the T.A., all of it is direct from NPA reps at either Piccadilly luncheons or the road shows:

To answer your questions:

No, there's nothing new. Recall petition has reached the required number and has been accepted and will be out for vote in 2-3 weeks.

The problem with the NPA getting their own insurance plan for the pilots is that they couldn't exclude certain pilots with pre-existing health problems or their family members that do.

In a 1700+ pilot pool, there is an almost 100% certainty that there are at least one or more Hepatitis-C or AIDS or cancer pilots or their immediate family members; the NPA can't exclude those people from a private insurance plan - they all pay dues.

The alternative I proposed was the "healthy AirTran Pilot's Club" (as a private club we could exclude people who didn't qualify and let them stay on company insurance). I looked into group rates (my wife's in the health insurance biz with a local hospital) and the rates weren't incredibly better. In fact, we only saved $50 a month on average and the co-pays and deductibles were all higher and almost averaged out in the end.

That's because the company is paying roughly 60% (supposedly) of our premiums. No, I don't know if we've been able to audit their books. Our premiums are high because we're supplementing the other work groups that have some of the above mentioned health problems or are very unhealthy (chain smokers or obese or drug users - it's not hard to figure out why). The company pays 60% of those higher premiums and comes up with a rate for us that's similarly high.

The company has a couple hot-button items, and this is one of them. I don't think we'll see them budge on it without forcing the issue.

And yes, the company can increase BOTH premiums AND copays more than once throughout the contract in the new T.A.

 

[IdRtherBsailing]

That's because the company is paying roughly 60% (supposedly) of our premiums.

That is exactly what I am saying. That is pretty bad. I mean at my last job we all threw a fit when the company went from paying 85% to 75%. 60 is too low. Couldn't your pilots bargain with say 1% of the pension plan. Give back 1% and increase what they spend on premiums. I am sorry but that is way below the national average. Thanks for the clarification by the way.

 

[CitationLover]

That is exactly what I am saying. That is pretty bad. I mean at my last job we all threw a fit when the company went from paying 85% to 75%. 60 is too low. Couldn't your pilots bargain with say 1% of the pension plan. Give back 1% and increase what they spend on premiums. I am sorry but that is way below the national average. Thanks for the clarification by the way.

there is a company that has a product called Benefit Index that compares the "value" of your benefits to a peer group, the client chooses the peers. it is called benefit index and it will tell you exactly where you stand in terms of benefits, etc. it measures:

Vacation
STD
LTD
Health/Medical
Pension
Savings
and more

http://www.hewittassociates.com/Intl/NA/en-US/OurServices/ServiceTool.aspx?cid=2255

it costs about $15,000 and would be a nice tool to use during contract negotiations. this is what the company uses against you in negotiating an "average" benefits plan.

 

[Lear70]

CL, that's what we pay ALPA's EF&A department for, and they have provided that information. No, I didn't get to look at those numbers and even if I had, I couldn't discuss it without release from my confidentiality agreement, but the NPA has that data.

My personal opinion, not having seen the data, is that our contract overall places us about 1/3 from the bottom of the major airline pack in terms of overall compensation. Being the highest-paid 717/DC-9 Captains and the 10.5% B-fund plus eventual 2% 401(k) match helps bring up our compensation package with bottom-of-the-barrel F/O rates and medical insurance. Believe it or not, our health insurance isn't the highest of the majors - it's actually lower than one or two, although it IS higher than most...

As far as giving up any of the new 401(k) match to get lower premiums, the company won't even discuss it, but our NC wouldn't try that anyway.

We have a problem here at AirTran discussed in the road shows with junior pilots contributing to their 401(k). We don't make enough to have the extra cash so almost none of us do in our 2nd and 3rd year, not to mention that guys have been so close to upgrade they just figure instead of putting 1-2% in, they'll just make it up next year when they upgrade.

That's causing a LOT of senior CA's who are maxing out their 401(k) to get a check back in the mail at the end of the year, taken OUT of their 401(k) then taxed at 40+% because this work group has failed one of the IRS tests, I believe it's called the "high-low" test which requires a more even split of participation.

What does this mean? It means the 401(k) match wasn't bargained to benefit the new guy; it was bargained for so the junior pilots would have an incentive to contribute so that the pilots maxing out their 401(k) wouldn't get smacked with a year-end penalty. Not saying I wouldn't contribute as an F/O - I would, up to their match percentage, but it's not a benevolent contract increase and isn't worth that much in terms of actual money cost to the company at our current participation levels.

The company doesn't want to touch our insurance premiums because the other employee groups would want the same new rates as well and it opens up a bigger can of worms with the company's motto that "No employee group is more important than any other."

Incidentally, I agree with you that 60% is way too low. My last carrier was $120 a month for the equivalent of our Gold PPO plan at AAI that would cost me over $600 a month.

Luckily, I'm on my wife's health insurance which, amusingly enough is THE SAME company and plan that our Bronze HMO provides - Aetna. Except we pay $160 through her company, here it would be nearly double that.

 

[CitationLover]

the test is nondiscrimination testing. if the HCE (highly compensated ees are ones making over $90k/yr) average accrual rate (ie how much you defer) has to be within 125% of the NHCE (Non HCE). the giveback is simply the amount of money needed to be at 125% then ratioed by the respective HCE contribution amount.

ALPA's EF&A simply compares the plan's values amongst it's members, Hewitt's actually costs out changes and compares the costs (I doubt ALPA knows anything about costing out a medical plan, disability plan, pensions, etc).

the junior pilots who aren't contributing are simply dumb. tell them to talk to a financial adviser and see which is better: some schmoe who contributes 10% for 10 years early in their career, or someone who contributes the max the last 25 years of their career.

 

[Lear70]

Excellent summary on the high-low test, thanks.

ALPA's EF&A simply compares the plan's values amongst it's members, Hewitt's actually costs out changes and compares the costs (I doubt ALPA knows anything about costing out a medical plan, disability plan, pensions, etc).

I doubt it, but I'll let PCL or one of the other guys more experienced with ALPA National explain it; I'm sure he'll do a much better job.

the junior pilots who aren't contributing are simply dumb. tell them to talk to a financial adviser and see which is better: some schmoe who contributes 10% for 10 years early in their career, or someone who contributes the max the last 25 years of their career.

Thanks. That would include me. I guess I've been called worse than "dumb", though...

I contributed at my last carrier because I could afford it making $70-80k a year. Here I couldn't first year - actually used most of my savings simply trying to survive on $3,000 a month with a family of four.

I can this year, but haven't because there's really no incentive. No match from the company, they're already giving me 10.5% without me spending a dime, and I'm actually enjoying breaking even every month taking home $3,400. Doesn't help to contribute 10% if I have to rob it from my savings to pay the bills, now does it? Or would that be "dumb", too?

This is why it's so important to get F/O rates about 15-20% higher than they already are... you can't ask a guy to contribute to his 401(k) if he can't pay a $1,000 mortgage, $300 in health insurance (HMO), a $250 car payment, a student loan, plus all the other daily living expenses like car insurance, gas, utilities, groceries, etc.

 

[CitationLover]

sorry, personal savings is a little soap box topic for me....

the point is you're getting 10% from somewhere. but sooner or later you will see that age 60/65 is fast approaching and starting earlier is much better than starting faster later, simple mathematical fact. the 10% though is only yours after 5 years correct (ie your 100% vested at 5 years)? i wouldn't count on this until that point.

if you cannot afford 10% pretax savings, then perhaps you are living slightly above your means. your wife appears to be working also from prior posts. talk to a financial planner, they'll happily talk to you for free and try to sell you something, but see the hard facts they will show.

you obviously made it on first year airtran pay. the bump to second year pay could at least put some in some sort of independent savings (401(k), investment account, something).

our country has placed such an emphasis on college combined with the fact of a federal government willy nilly anyone can get a college loan program has only lead to increasing and increasing college costs. student loans are simply driving people in such a hole these days that they can never get out. my $0.02.

 

[PCL_128]

I doubt ALPA knows anything about costing out a medical plan, disability plan, pensions, etc

Incorrect. That's exactly what ALPA's E & FA department is for. They have a team of actuaries that's top notch in doing exactly the kind of calculations that you're referring to. Many airline managements have even contracted these services through the ALPA Services Division (the same division that the NPA goes through) because they are so well respected throughout the industry. Whether it's medical, disability, pension, 401k, work rule adjustments, etc..., ALPA's team of actuaries knows exactly how to calculate the actual dollar amount and the change from the current book.

 

[Lear70]

if you cannot afford 10% pretax savings, then perhaps you are living slightly above your means.

Hmmm, nope. Not really. Do you have kids? They're expensive.

Been through all this with a financial planner and there's absolutely ZERO way to squeeze any extra money out of the budget and we live in a 2,100 sq ft $170k house and have one car paid off (2000 Audi) and my truck payment (2002 Dodge 1500 for $12,000 at $250 a month), zero credit card debt.

Or, more specifically, we could, but it would mean absolutely NEVER EVER going out to dinner and a movie, NEVER taking a vacation, and not buying ANY Christmas for anyone. Including the kids.

I'm sorry, I refuse to live like that. You never know when you're going to check out, and I'm going to at least enjoy my life. That means going once or twice a year to the beach, going out once every week or two for a nice dinner and a movie with the wife, taking the kids bowling, etc.

your wife appears to be working also from prior posts. talk to a financial planner, they'll happily talk to you for free and try to sell you something, but see the hard facts they will show.

Yes, she does. She has no degree and just covers her own expenses including the $600 a month for childcare for an infant. We've actually toyed with the idea of her staying home because of it...

I've seen the "hard facts", and even THEY couldn't see a way to make it work on last year's salary.

you obviously made it on first year airtran pay.

Yeah, but I think you missed the point where I was ROBBING MY SAVINGS to do it, taking $300 to $400 a month out to pay the bills.

the bump to second year pay could at least put some in some sort of independent savings (401(k), investment account, something).

It could, probably around $100 a month, but the election came while I was still on 1st year pay during open enrollment. Will elect into it this November again.

our country has placed such an emphasis on college combined with the fact of a federal government willy nilly anyone can get a college loan program has only lead to increasing and increasing college costs. student loans are simply driving people in such a hole these days that they can never get out. my $0.02.

Must be a nice glass house you're living in. How did you get your degree? Do you have one? How did you pay for it?

Unless you're a stripper, working full-time while taking 18-21 hours of college credit a semester barely pays for your housing, food, and books. MAYBE some of your tuition if you're in a state school, and sure as hell doesn't pay for flight lessons.

A student loan is a vital necessity unless Mommy and Daddy are paying for college. Maybe not to the extent where you live off them and get out of college $150,000 in debt, but having $20k in student loans with all your ratings and a 4-year degree with a $150 a month payment isn't going to put anyone "in the hole".

 

[CitationLover]

Incorrect. That's exactly what ALPA's E & FA department is for. They have a team of actuaries that's top notch in doing exactly the kind of calculations that you're referring to. Many airline managements have even contracted these services through the ALPA Services Division (the same division that the NPA goes through) because they are so well respected throughout the industry. Whether it's medical, disability, pension, 401k, work rule adjustments, etc..., ALPA's team of actuaries knows exactly how to calculate the actual dollar amount and the change from the current book.

you're right. one of the world's largest employee benefits consulting firm wouldn't have the expertise that ALPA has in this matter....

 

[PCL_128]

you're right. one of the world's largest employee benefits consulting firm wouldn't have the expertise that ALPA has in this matter....

Oh, I'm not saying that they couldn't do it. I'm sure they're great at what they do. I just don't see the need when we already have a services agreement with an organization that is perfectly capable of doing the job.