Although healthcare costs have been increasing nationally for decades, especially for employers, overall healthcare costs for rail employees remain low while benefits remain among the best in the nation. The freight railroads in the US continue to deliver world-class healthcare to employees and their dependents while providing additional benefits agreed-to in the most recent national bargaining round, including expanded support for hearing aids and care for autism spectrum disorder (ASD).
LOW EMPLOYEE CONTRIBUTIONS
Rail employees currently contribute only $309.21 per month for family coverage for this platinum-level coverage compared to the benchmark average of $457 for other large employers.
The Affordable Care Act (ACA) defines four health care categories: Bronze, Silver, Gold, and Platinum. These categories represent an estimate of a health plan’s actuarial value – or the average percentage of healthcare costs that are paid by the Employer. Most large employers offer Gold plans, with an actuarial value of about 85 percent. The railroads continue to provide Platinum plans, with an actuarial value of 92 percent that continues to increase annually.
The Plans’ high actuarial value is driven by low member out-of-pocket cost sharing. The chart below compares the employee contributions (premiums) and other key in-network cost sharing features under the Railroads’ primary Plan, which covers more than 90% of the population, to those of the median PPO (Preferred Provider Organization) health plan as reflected in leading industry surveys.
EMPOWERING HEALTHIER EMPLOYEES
The healthcare industry and how medical services are delivered have evolved significantly over time, particularly in recent years. Like other large employer health plans, the Plans and rail employees and their families also face this changed landscape. To preserve the quality of the Plans and help improve the health of America’s current and future railroad employees, the Plans similarly need to Implement more modern solutions and respond to market trends. By enhancing communications and improving engagement, addressing plan administration needs, responding to rising costs, and re-thinking the existing single tier employee contribution structure, the railroad health Plans can remain the most comprehensive and among the best in the country for years to come.
IMPROVING COMMUNICATIONS & ENGAGEMENT
Improving member engagement – or the degree to which plan members participate in and make good decisions regarding their health care – will lead to more sustainable health care costs and help employees and their dependents lead healthier lives and improved health outcomes. The Plans use modern communications strategies to encourage members to use currently offered resources such as digital health care options like Teladoc for telemedicine, the Cleveland Clinic Cardiac Care Program Center of Excellence (COE), 24/7 nurse support, and carve-out programs that target specific health conditions including expert second opinions.
As we move forward, adding new programs for digital physical therapy, diabetes, and weight management would enhance support for members to live healthier lifestyles.
ADDRESSING PLAN ADMINISTRATION
The Plan is jointly administered by representatives of the labor organizations and management. Current Plan administration practices can be improved to control increasing costs and ensure members are supported by key programs and services currently offered by most Fortune-100 employers. In 2023, and as part of the national rail labor agreements that concluded in 2022, the railroads and the rail labor organizations will be embarking on a joint comprehensive re-bidding of the vendors and programs that currently serve the Plans. This is one example of the many opportunities the parties can work on together outside of collective bargaining to enhance the Plans’ services and control costs.
RE-THINKING SINGLE TIER STRUCTURE
A single tier monthly employee contribution structure is not offered by any large employer outside of the railroad industry. The monthly contribution rate for railroad employees is currently $309.21 for medical coverage, regardless of the number of dependents covered, and there is no option of whether to enroll in dental, vision, and life insurance coverage. Providing for additional coverage tiers and options would more evenly allocate contributions among employees based on dependent enrollment and provide optionality that does not exist today.
We will continue to look for opportunities to improve upon the programs and services currently offered to our members while considering other opportunities to control escalating costs. Since the 2010 bargaining round, there have been minimal changes to the Plans’ design while adding several key programs to assist members in improving their health and well-being.
Opportunities also exist between each bargaining round for Labor and Management to work together to identify shared opportunities to improve how the Plans operate, deliver the best health outcomes for our members, and to prudently address the ever-increasing costs of healthcare.