THE LATEST IN MEBA MEDICAL PLAN FUNDING

THE LATEST IN MEBA MEDICAL PLAN FUNDING

A document from the Plans Administrator dated 4-24-06 was mailed out to Active Participants of the Medical Plan and posted on the MEBA PLANS Website on 4-28-06 under “What’s New”. The document explains the latest changes to the MEBA Medical Plan Funding fiasco facing the Trustees.


The delay in notifying the Membership of these changes, which were decided upon at the February Trustees Meeting, is probably due to logistics of legal implementation and timing of the changes as it affects Company payroll figures.

While the document is pretty self explanatory it leaves many questions regarding the issue of Medical Plan funding in general.

1. If issued on 4-24-06 why was this not posted in the Telex Times to notify our Brothers out at sea? There have been three issues of the Telex Times issued since this came from the Plans Office yet no mention of Plan changes.

2. The 1% contribution rate established for active participants reinforces the view that the current contract contribution rates gained by the Union Collective Bargaining Group are not adequate to fund the Plan. Remember that the Union Negotiators and Officials continually assured us that the contracted rates would solidify the Plan well into the future for active and retired members. Yet the retirees were hit with large increases in their contribution rates. The efforts of active members and retirees are reflected in the February changes.

3. Next I refer you to the Blog entitled “Fact or Fiction-or Is It Election Time” that was posted 3-28-06. This Blog details the information sent out by MEBA TEAM II in their re-election literature prior to the ‘04 election and their representation of the Medical Plan at that time. Their representation of the Plan was a vital election Platform for MEBA TEAM II.




To: Active Employees/Participants in the MEBA Medical and Benefits Plan
From: Allen R. Szymczak, Administrator
Date: April 24, 2006
Re: Changes Relating to Active Employees/Participants and Pensioners

As we previously informed you, rapidly rising health care costs have seriously hurt virtually every medical plan in the country. The MEBA Medical and Benefits Plan (‘Plan”) has suffered the terrible impact of this nation-wide health care crisis as well. The Plan’s Board of Trustees has taken significant measures to protect the Plan’s financial reserves while continuing to provide outstanding health care coverage for the Plan’s active and retired Participants and their families. In order to accomplish this critically important objective, the Trustees implemented several important changes at their October, 2005 meeting that affected both retired and active Plan Participants and their families. Those changes were reported in a Notice sent out to all Plan Participants in October, 2005.

A large number of active and retired Plan Participants provided valuable and well-received input regarding the changes that were implemented in October, 2005. The active Participants have understood and accepted the overall need to make those changes, but they, like many of the Plan’s retired Participants, were concerned about certain changes that affected only the retirees and their families. Recognizing that they themselves will one day be MEBA retirees and that they will want MEBA retiree benefits for themselves and their families, many of the active Participants expressed their willingness to pay medical contributions out of their paychecks in order to partially offset the financial impact of the recent changes affecting MEBA retirees.

In response to those comments and suggestions, the Board of Trustees modified and rescinded certain of the financial obligations that were imposed upon the retirees in October, 2005, and have now also implemented additional changes that affect the active Participants and their dependents. The Board of Trustees unanimously adopted these changes, which are explained below, and believes that these changes accommodate the needs of all the Plan’s Participants, both active and retired, in such a way that it can still accomplish its fundamental objective of ensuring the long-term survival and financial well-being of the Plan.

Changes Affecting Active Participants and their Dependents

1. Mandatory Employee Contribution, effective July 1, 2006.
Effective July 1, 2006, all Active Employees/Participants will be required to contribute to the Plan 1% of their gross IRS Form W-2 wages earned while working in covered employment This mandatory contribution will also apply to all vacation pay earned while working in covered employment on and after July 1, 2006. Except as set forth herein, these contributions will be deducted directly from your paycheck by your employer and, where applicable, the MEBA Vacation Plan, commencing on and after July 1, 2006. For vacation benefits payable by the MEBA Vacation such deductions will begin with payments made by the Vacation Plan for vacation earned on and after July 1, 2006. Finally, these mandatory contributions will be deducted “pro-tax” from your gross pay, such that they will not be subject to federal withholding taxes.

2. Retiree Medical Eligibility Rule of 75, effective January 1, 2011.

A. General Rule: Effective January 1, 2011, except as set forth in Section 2.C, below, in order to be eligible for retiree medical benefits from the Plan, a Pensioner must have accumulated a combination of age and Pension Credit equal to at least 75. For example, a Pensioner who on January 1, 2011 is 50 years old and has 25 years of Pension Credit satisfies this eligibility “Rule of 75.” As such, he and his dependents would be immediately eligible for retiree medical benefits from the Plan. A Pensioner who, on January 1, 2011, is 50 years old but has 20 years of Pension Credit will not satisfy this eligibility Rule of 75; therefore be and his Dependents will not immediately eligible for retiree medical benefits.

B. Deferred Eligibility: If this Rule of 75 is not met at the time of retirement, the Pensioner and his Dependents will not be immediately eligible for medical coverage, but will be allowed to participate in the Medical Plan when the Pensioner meets the Rule of 75, provided be complies with the following conditions:

(1)Hold-Down Contribution: To preserve the right to come into the Plan as a Pensioner when the “Rule of 75” is met, the Pensioner will be required to pay a nominal contribution of $20 per month. During this period of time, the Pensioner and any Eligible Dependents will be allowed to use the Diagnostic Centers. If a Pensioner who does not meet the “Rule of 75” chooses COBRA Continuation Coverage to maintain Active coverage, however, the $20 contribution will be waived until such time as the COBRA Continuation Period ends or the Pensioner meets the “Rule of 75,” whichever occurs first

(2)Election Period: Pensioners who attain the Rule of 75 after retirement must immediately begin participation in the Plan as a Pensioner or they will forego their right to participate forever.

C. Disability Pensioners: Disability Pensioners will be allowed to Participate in the Medical Plan without meeting the Rule of 75.

Recent Changes Affecting Retirees And Their Dependents

1. Effective retroactive to February 1,2006, the Pensioner Medical Contribution requirement for non-Medicare eligible Pensioners with dependents has been changed to 6% of their monthly pension (calculated as a straight life annuity) or $500.00, whichever is greater. This change reduces the $700 Pensioner-With Dependents Contribution obligation that had been implemented at the October, 2005 meeting.

2. Effective February 1,2006, all non-Medicare Pensioners may choose to drop dependent coverage. Such dropped dependent coverage may be reinstated on a one-time basis, provided that proof of other insurance coverage for such dependent(s) while not covered by the Plan is provided to the Plan Office within 30 days of the termination of such other coverage, If such proof is not provided, the dropped dependent coverage cannot be reinstated.

3. Effective retroactive to February 1,2006, the $800 Pensioner Medical Contribution cap that was applicable to both Medicare and non-Medicare eligible Pensioners is eliminated. The $800 cap had been implemented at the October, 2005 meeting.

4. The annual Cost-of-Living Increases applicable to the minimum Pensioner Medical Contribution Rate that were to go into effect beginning July 1,2008 have been eliminated. This COLA provision bad been implemented at the October, 2005 meeting.


If you have any questions, please contact the Plan Office at (410) 547-9111 or (800) 811-6322 and ask for the Member Services Department.

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