Boeing to shift health costs to workers

The Wall Street Journal: Boeing will increase the costs of health insurance for its 90,000 nonunion workers next year in response to rising health costs, spurred, in part, a Boeing official said, by the federal health law. The company plans to "phase in higher employee costs for deductibles, co-payments and co-insurance during 2011. In 2012 … employees under a certain type of plan will see their coinsurance payments go from 10% to 20% up to the out-of-pocket maximum." A senior Boeing executive wrote in a letter to workers that laid out the plan, "The newly enacted health care reform legislation, while intended to expand access to care for millions of uninsured Americans, is also adding cost pressure as requirements of the new law are phased in over the next several years" (Sanders, 10/19). 

The Associated Press: "Boeing is the latest major employer to signal a shift for its workers as a result of the legislation, which expands coverage to more than 30 million uninsured people and ranks as President Barack Obama's top domestic achievement. Earlier, McDonald's had raised questions about whether a limited benefit plan that serves some 30,000 of its employees would remain viable under the law. That prompted the administration to issue McDonald's a waiver from certain requirements under the law." Some of Boeing's concerns appear far off, however, such as a tax beginning in 2018 that would affect high cost health plans. Another executive said, " If this health care law hadn't passed, would we be making changes to the health care benefit? Absolutely" (Alonso-Zaldivar, 10/18).

Seattle PI: "A Boeing spokeswoman said the company would've made the changes even if the bill signed by President Barack Obama hadn't become law. 'Yes, we are making health care changes. If you would've asked me if we would've made these changes without the enactment of the law, I would've said yes,' company spokeswoman Karen Forte told seattlepi.com Monday evening.  'We're just out of line with market. We've been contemplating what can we do to reduce costs,' Forte said. 'It came down to, we've got to pass some of these costs down to our employees'" (Grygiel, 10/18).

The St. Louis Business Journal adds some detail: "Right now, the company covers 100 percent for most services. In 2011, Boeing will pay 90 percent and ask employees to chip in 10 percent. In 2012, the split will be 80-20. Boeing pays about $2 billion a year on health care and expects that to rise 7 or 8 percent in annual inflation, Forte said. If Boeing hadn't asked its employees to shoulder more of the costs, the company would have to pay $3 billion on health care in five years, she said" (Volkmann, 10/18).

Also in employee-benefits news, "Contract negotiations between the Kroger Co. and the local chapter of the United Food and Commercial Workers are continuing as the two groups weigh terms of health care provisions and wages," the Cincinnati Enquirer reports. "Kroger's latest offer to the union would require members to pay on average more than $1,500 in additional health care costs over three years, according to an Oct. 16 memo on the web site. Those increases could happen through higher co-insurance, an additional tier for health care and higher out-of-pocket maximums" (Baverman, 10/18).