Many will see $2 reduction in health care contribution

April 10, 2012

Some 38,000 UTU members covered under the national rail contract will see a $2 reduction in their monthly health care contribution effective July 1 and continuing through June 30, 2016.

Health care insurance savings, in part made possible by the 2011 ratified national rail agreement, permitted the UTU and other rail labor organizations to seek the monthly reduction in the member contribution.

The national rail contract, ratified overwhelmingly by members last summer, included a negotiated cap on member contributions, putting that cap at $200 monthly, while carriers pay more than $1,401 on behalf of each employee covered under the national rail contract. Without the negotiated cap on member contributions, the monthly cost to members for health care insurance could escalate to $355 by the end of the agreement period.

The carriers’ health care savings, expected to be realized as a result of the 2011 national rail contract, permitted the $200 cap to be reduced to $198 effective July 1, and that lower $198 monthly cap will continue in force through June 30, 2016.

That $198 cap, and its length of time in force, is significant, as federal workers, for example, already pay more than $430 monthly for their family health care plan, and that cost is expected to rise in future years as health care costs generally continue a march upward.

The 2011 national rail contract also caps the family deductible at $400 annually, and the annual out-of-pocket maximum at $2,000, compared with a $700 maximum family deductible for federal workers and a $5,000 annual out-of-pocket maximum for federal workers.

Many in the private sector face even higher health care costs, while more than 40 million Americans have no health care insurance.