To: Alcatel-Lucent (Nokia) Local Presidents and Formerly Represented Retirees
Re: Results of the Joint Retiree Healthcare Committee (JRHC) negotiations for calendar year 2018
As we have reported in the past, as negotiated in 2004, each year the JRHC reviews the formerly represented retiree healthcare costs, projected by the Company, to have exceeded the negotiated Retiree Healthcare Caps for the upcoming year. The JRHC is required to “True Up” the balance of the excess cost by making changes to the Medical and/or Prescription Plan Designs, as well as Provider recommended programs designed to help save future costs for the Plans and for the Retirees. The JRHC must also consider possible increases to Retiree Contributions over and above those mandated by the collective bargaining agreement.
For Plan Year 2018 the deficit the committee was faced with was $30,000,000.
Premiums - Given this amount of deficit the Committee was able to get by with a modest increase to the retiree contributions for the MAPPO and POS; the contributions for Pre-65 Retirees will increase to 14.5% for single and 29% for family (Current premiums are 14% single and 28% family) The premiums for the Post 65 Retirees will be 10% for single and 20% for families. (Current premiums are 9.5% single and 19% family) In addition, due to the enormous cost to the plan; the cost adjustment contributions for those who elect Traditional Indemnity (TI) over the default MA PPO will continue and have increased significantly. The cost adjustment contributions for pre 3/1/90 retirees who elect TI will be 11% single and 22% family. For those retirees who are post 3/1/90 who elect TI the cost adjustment contributions coupled with the premiums will be 21% single and 42% family. The projected cost savings beyond the 0.5% contractual increase is $2,260,000.
Prescription Drug Program - Slight modifications to the prescription drug co-payments were made for both retail and mail order. The new co-payments are Retail - $14/47/82 (currently $12/45/80) and Mail Order - $35/118/205 (currently $30/112.50/200). The out of pocket maximum remain the same at $1,600. The retail deductible will be increased to $100 from the current $75. The Prescription Drug Utilization Programs that we currently have in place will continue to expand to include other categories of drugs.
The projected savings attributed to these changes is $2,130,964.
Medical Plan – The MAPPO deductible will increase from $275 to $300, the in-network POS deductible from 1% to 1.2% of pension and out-of-network POS deductible from 6% to 6.5%. The TI deductible will also increase from 3% of pension to 3.2%.
The projected savings attributed to these changes is $702,000.
Dental Plan (Traditional Option) – An annual deductible of $25 (excluding preventative services) will be implemented.
The projected savings attributed to these changes is $473,339.
Trust - Finally, the JRHC will be utilizing up to $24,433,697.00 from the Taft Hartley Trust to shore up the remainder of the deficit.
If you have any questions please email Ruth Marriott at email@example.com