American is aligning the benefits available to employees when they retire with those offered by other airlines and large corporations.
Note: Retirees who retired before Nov. 1, 2012, are not part of these changes. Medical benefits for these retirees are being addressed through a separate process in the bankruptcy proceedings.
New Medical Plan for Active Employees When They Retire
As of Nov. 1, 2012, employees no longer prefund their retiree medical costs, but instead have moved to a post-funding model. This means retirees will pay for their retiree medical coverage at the time they are using it, instead of putting money into a company-sponsored retiree medical trust while employed by American.
Employees who have prefunded their retiree medical coverage, but have not previously received their prefunding balance, will be refunded their portion of the retiree prefunding account, including investment experience.
Employees Retiring Before Age 65
Employees who retired on or after Nov. 1, 2012, and before age 65, were offered access to one of two company-sponsored Pre-65 retiree medical options. The retiree will pay the full cost of the projected annual expenses, including administrative expenses, for this coverage beginning Jan. 1, 2013.
For 2013, employees will be offered the same Pre-65 plan design as offered to agents, representatives, planners, management, and support staff retirees. The full contribution cost for a retiree enrolled in the Retiree Standard Medical Plan in 2013 is $462 per participant per month and $667 per participant per month for the Retiree Value Plus option.
Though American intends to continue offering employees access to Pre-65 coverage, we reserve the right to modify, amend or terminate the plan at any time.
Employees Retiring at Age 65 and Over
As of Nov. 1, 2012, retirees age 65 and older are offered access to Medicare supplement plans through a third-party administrator, to the extent available. These plans are “guaranteed-issue,” which means any retiree will be eligible, regardless of the age they enter or any pre-existing health condition.
Medicare supplement plans offer more choices, flexibility and coverage than the current Post-65 American plan. These plans are offered by numerous insurance companies, with costs based on the location of the retiree and the level of coverage needed.