Originally Posted by
TonyC
You must remember that this benefit, the pre-medicare HRA account, was structured in the form of a VEBA -- Voluntary Employee Beneficiary Association. It is a form of a trust, and has specific requirements that must be met, and then the employer's contributions to the VEBA are tax-deductible.
One of the requirements of the VEBA is that it must be nondiscriminatory in the payment of its benefits (unless it was established pursuant to a collective bargaining agreement)...
As was explained at the time of the CBA ratification process, the date was chosen to include all the pilots who might possibly retire during the expected life of that CBA.
... You may not appreciate the nuance, and perhaps don't care, but I see a distinction between creating incentives and removing disincentives. The Post-Retirement (Pre-Medicare) Health Care VEBA was not intended to be an incentive to retire. It was intended to remove a disincentive to retire.
The Pre-Medicare VEBA was intended to offset the costs that a retiree would incur, not to enrich him as a reward for retiring.
The HRA is an individual account worth $25K (partly paid with scope money obligated to all union members) to those over age 53 on 1 January 2008. Sec 27.H.7.c & Sec 27.I.7 shows this is an incentive to stay. First section specifically prevents pro-ration (it was not, we didn't think of that). The second allows the HRA to pay for Post-Medicare Healthcare. Now look at third sentence of Sec 27.H7.e. "Any unused amounts in the HRA at the last to die of the pilot, eligible surviving spouse and eligible surviving dependents will be forfeited to the VEBA." So there was enough thought to keep the HRA money in the trust under these conditions, but absolutely no thought about returning unused portions to the trust at age 65. This was sold to the membership as "removing an impediment to retire" or "removing a disincentive to retire". But is written as a give away.
Maybe this should be the "Group Trust Fund" to provide money between 60-65, kind of like removing a disincentive to retire!
And the VEBA is a trust, with conditions set by the CBA. So this was possible. Just not profitable for some.
Now for the Post-Medicare Healthcare.
If a pilot is paying for it, shouldn't the pilot have access to the money when needed? Why not use the VEBA trust ($0.50/CH) to go into individual pilots trust based on their employment history (kind of like seniority!), instead of group trust fund? Why not get out what you put in? ALPA is tracking dues, and $25K plus interest for every pilot over 53 as of 1 January 2008!
The Post-Medicare is a group fund which conveniently we all pay for regardless of how much is contributed. I think the CBA healthcare was designed more to profit some individuals at the expense of the rest.
I like the $0.50 VEBA Trust if all who pay into it have access to the money! Using other healthcare should save trust money for others when needed without discriminating against those with other healthcare. I just can't shake the feeling that the CBA was designed to funnel money to specific groups vs looking out for all members.
Originally Posted by
TonyC
…We don't need seniority (or age) wars.
Than how come there kind of is!
Originally Posted by
TonyC
How would you go about codifying it today, for everyone, forever, in light of the fact that the healthcare industry has undergone radical changes over the past few years, and will likely undergo more changes in the near future? Do you have a plan that will adapt to all scenarios imaginable?
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As I understand healthcare at FedEx (I do not have Tricare, so may be incorrect).
Tricare is primary and FedEx picks up remaining cost as a secondary insurance. So the Post-Medicare should have a secondary insurance vehicle for ALL pilots to benefit for what they "paid" for.
Unused DSA goes into HRA.