Originally Posted by
Rock
Those are the "Estimated Projections" based on the stated assumptions. The Projections that will determine our 2017 Cost Share will be developed by a Company-selected actuary by June of 2016. If the stated assumptions are incorrect, or the market changes, or the actuary considers other factors next June, those numbers could vary wildly, and there's nothing we can do about it.
There's a huge difference between PROJECTION and PROTECTION. Right now we have proTection that the rates will not rise more than 6% every year. The Negotiating Committee (the same group that believes 3% + 3% + 3% = 8%) is giving us proJections. There is NOTHING to proTECT us if those proJections are wrong.
If the cost of health care suddenly rises, as it has every year since the passage of the Affordable Healthcare Act, and the 18% cost share for a Pilot and his Family on the Buy-Up plan is $800 instead of the currently projected $407.31, there's nothing we can do about it. Even the $407.31 was $121.74 (42%) higher than the maximum it could be under the current CBA, or 50.7% higher than our highest possible 2016 rate (2016 CBA limit: $270.34, Plus 50.7% equals $407.31, 2017 Estimated Projection). But if the cost of health care rises more, there's nothing to protect me in 2017 from having to pay more. NOTHING.
Originally Posted by
Rock
Those projections will be compared to actual expenditures once the year is complete. If the actual expenditures are different than the forecast the difference will be accounted for the following year with a max increase of 10%.
The Company's actuaries would be foolish to calculate anything less than a 3% buffer to add to their 2017 health care cost estimates. If their projection is 3% high, meaning I pay an 18% share of a 3% inflated projection (developed in June 2016) instead of an 18% share of actual costs (calculated sometime in 2018), there is no penalty to The Company, and no repayment or adjustment for The Pilot.
Example: As soon as practicable in 2018, the total projected per capita costs for all pilots and survivors paying active rates for 2017 will be compared to the actual costs for 2017, and if the actual costs are more or less than the total projected costs (outside a corridor of +/-3%), the difference times the 2017 contribution percentage shall be applied to 2019's contributions for all pilots and survivors paying active rates participating in 2019; provided that the total monthly contributions for any coverage tier will not be more than 10% over the monthly contributions payable for such coverage tier for 2018.
If it is determined in the 2018 "after year" analysis of 2017 actual costs that the Projected Costs were only 3% more than the Actual costs, no corrections will be required, no adjustments will be made, no refunds arranged. By that time, the rates for 2018 will also have been established, and they will be limited to 19% of projected costs and capped at 10% more than the 2017 rates. As long as the difference between projected costs and actual costs remains within the 3% corridor, no corrections will be made.
By the way, who here has not heard that our B Plan contributions will be increased by
28.5%? Our R&I Committee Chairman is quick to point out that the 1% bump to our B Plan at DOS plus another 1% bump 4 years later amounts to a 28.5% increase to the current 7% B Plan.
Who here has heard that the cost of the Buy Up Healthcare Plan will increase (according to their projections)
42%?
I wonder why one number is in the Roadshows, but the other is not.
That's not true. I don't wonder that at all.
.