06.19.2002 - Many Retired Teamsters received a surprise in their mail box yesterday from Ronald J. Kubalanza, the Executive Director of Central States Southeast and Southwest areas Health and Welfare Fund. The letter was dated May, 2002, but many members received the notice in the middle of June 2002. The effective date for the mandatory increase is July 1st, 2002. Hardly adequate time to budget in additional expenses when on a fixed income.

The letter that was mailed indicated that the Health and Welfare Fund experienced a loss of $98 million in the year 2001. It also stated, absent a change, the Fund's actuaries project that the total cost of the Retiree Health Plan alone, after applying Retiree contributions of about $15 million, will approximate $200 million during 2002. 

One can't help but criticize the huge increase. Health care costs have been going up  since the inception of the retiree coverage plan. The $50 dollars a month contribution has remained unchanged since October 1st, 1988. 

Other healthcare coverage's  increase their rates in piecemeal to stay out of the red and are applied in small annual increases. Simply accounting procedures would dictate a need of additional funding to keep the plan solvent by a quarterly review of  the balance sheets. To have a loss of $98 million in one year simply is a lack of attention to detail by the method or methods of controlling solvency. If the Director's hands are tied by the Trustee's approval of an annual increase, then it is clearly time to address the process that governs the plan.  

Depending on the age of the Retiree and their marital status, the $50 dollar contribution payment for retiree's has been increased as high as a whopping $200.00 dollars. Pensioners who have been privileged to retire before the age of 57 are having to ante up an additional $50 a month for the duration of their health care coverage. Whereas, pensioners who retire after age 57 will not have to pay the additional $50.00 dollars.

Here is the new rate plan as received in the mail from Central States:

For current retirees less than age 57 (as of June 30, 2002) and future retirees who retire before age 57:

The monthly contribution is $150 for the first person covered and $50 for the second person covered. The total monthly contribution for a member and spouse combined is $200. The monthly contribution for an individual member or an individual spouse is $150.

Important: The contribution rate does not change upon the retiree reaching age 57. Note: See exemption below for retirees eligible for less than a $1,000 gross monthly pension benefit from Central States Pension Fund.

For current retirees age 57 or older (as of June 30, 2002) and future retirees who retire at age 57 or later:

The monthly contribution is $100 for the first person covered and $50 for the second person covered. The total monthly contribution for a member and spouse combined is $150. The monthly contribution for an individual member or an individual spouse is $100.

Note: See exemption below for retirees eligible for less than a $1,000 gross monthly pension benefit from Central States Pension Fund.

Exemption for current and future retirees who are eligible for less than a $1,000 gross monthly pension benefit:

Regardless of age, any current or future retiree who is eligible upon retirement for a gross pension benefit of less than $1,000 per month from Central States Pension Fund, the monthly contribution remains at $50 for both the member and spouse. For purposes of this exemption, the gross benefit the retiree is eligible for before any reductions must be less than $1,000 per month. These reductions include the Joint and Survivor Option, Qualified Domestic Relations Orders (QDRO's), taxes or any other withholdings, and reciprocal pension adjustments. In addition, in the case of a spouse receiving a survivor pension, the retiree's benefit amount, not the spouse's benefit will be utilized. This exemption does not apply to individuals who do not receive a pension from Central States Pension Fund.

The letter also indicated the Fund will be sending separate notification to current retirees specifying their new contribution level and requesting their signed authorization to deduct the revised contribution from their pension benefit.

Naturally many retiree's will be hard hit by this $150 to $200 dollar increase when on a fixed budget. What to do? Give them a call at 1.847.518.9800 or better yet, send a letter to the Director and Trustees to let them know your feelings. Here is the address: