The information below describes the proposed medical coverage for active employees. While these are the proposed options the company intends to offer, the actual changes that will be implemented will not be finalized until later in the year.
American currently offers a variety of healthcare options to our employees. This is a costly and inefficient approach. American seeks to create universal health programs for employees that standardize and simplify our benefits programs. Therefore, American is planning to offer all employees three medical options: a Standard option; a Core, Health Savings Account-compatible option; and a Value option.
Cost Savings Goals
Our healthcare costs are unsustainable – higher than our direct competitors pay, and far above the average of what other businesses pay. A recent survey by the Kaiser Family Foundation reported that employees paid about 27 percent towards their healthcare costs, in addition to whatever out-of-pocket costs required.
The company is seeking to make the changes necessary to hold down costs, while continuing to offer competitive healthcare plans. American’s successful restructuring, and its very survival, requires us to rethink every aspect of our business, and that includes our healthcare plans.
Proposed Pilot Plan
American’s tentative agreement with the APA modifies the contractual Standard Option for pilots. Deductibles and maximum out-of-pocket costs have been reduced, as have employee contributions for spouse and family coverage. For pilots who enroll in the Standard Option, American will contribute $375 (or $750 if spouse is covered) into a Health Reimbursement Account that can be used to pay out-of-pocket medical and pharmacy expenses.
Contributions will be set at an aggregate 18 percent of the total projected 2013 healthcare expenses for the Standard and Core Options. Contributions will increase 1 percent each year to 21 percent of projected healthcare expenses for 2016 and beyond.
Summary of Changes
As part of its plan to modernize American’s healthcare system, the tentative agreement proposes:
Three Medical Options – Employees would be offered three medical options to choose from:
- Standard Option – the contractual option
- Core Option – Health Savings Account-compatible option
- Value Option – A voluntary medical option offered at higher monthly contributions
- Preventative Care – The company would pay for 100 percent of preventative care in all healthcare options if using an in-network provider.
- New Hires – New employees eligible for healthcare coverage will default to the Core option, which is the Health Savings Account-compatible medical option.
- Wellness Program – All employees enrolled in the medical options will have the ability to earn incentives for participating in the Healthmatters wellness program, provided they meet the criteria established by American and provided American continues offering incentives in any plan year.
This is not intended to be the plan document, but rather a summary of the proposed changes. You will receive a copy of the final summary plan description of the benefits once this process is completed.
Source: 2011 Mercer
National Survey of Employer-Sponsored Health Plans – Jumbo Employers (20,000 or