ARLINGTON, VA – Mar. 12, 2021 – A federal court in Washington, D.C. has dismissed a lawsuit filed by a group of labor organizations, paving the way for an arbitrator to decide whether certain administrative changes advanced by the nation’s class I freight railroads should be implemented to the national railroad health plans.

Railroad health care benefits are among the most generous in the nation. The plans that provide these benefits are administered by joint labor-management committees that have a legal obligation to properly administer the plans. When the committees are unable to agree on a matter related to how the plans should be administered, the parties’ agreements provide for binding arbitration to resolve the dispute.

The unions’ lawsuit alleged that the railroads improperly proposed two changes that, in the unions’ view, are not subject to resolution though the plans’ administrative processes and should instead be resolved through collective bargaining. The first proposed change involves realignment of insurance providers in a few geographic areas to obtain more favorable terms. This would reduce wasteful spending by the plan and save money for plan members – in the overwhelming majority of cases without any change in the in-network status of a member’s doctor or other health care service providers.

The second proposed change involves implementation of a pharmaceutical safety program recommended by the plans’ prescription drug benefit manager, Express Scripts, to help combat the ongoing U.S. opioid epidemic. This incremental change to an already robust program will enhance safety for employees and their families.

The railroads asserted that their proposals involve typical plan administration matters and that disputes over the proposals are subject to arbitration under the parties’ agreements. The federal court agreed with the railroads that the dispute is subject to arbitration and dismissed the labor organizations’ lawsuit.  The railroads now look forward to the arbitration process moving ahead and to a resolution of these matters in the coming months.

To learn more about railroad health care benefits and national negotiations, click here.


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