Download Comparing rail health care benefits to other industries

It’s Saturday, January 14, 2017
Railfacts:Comparingrailhealthcarebenefitstoother
industries
1/13/2017
Thenation'sfreightrailroadsarecurrentlyinnationalbargainingwith13laborunionsrepresenting
145,000employees,andtherailindustryiscurrentlyinfederalmediationwithallthreelabor
coalitions.Thisarticleispartofaseriesrelatedtoaspectsofthecurrentbargaininground,including
wages,healthcarebenefitsandworkrules,aswellastheeconomicfactorsimpactingtherailroads
duringthisround.
America'sfreightrailroadsprovidehealthcarebenefitsforemployeesandtheirfamiliesthataremore
valuablethantheaveragecoverageotherU.S.industriesprovidetheiremployees.
AtBNSF,thisistrueforallemployees--salariedandunion--coveredunderaBNSF-providedplan.
Butthebenefitsareespeciallyvaluableforunionemployeeswhencomparedwithotherindustries.
TheCurrentValueofHealthCareCoverage
Railindustryemployeescoveredunderthecurrentbargainingroundreceivehealthcarebenefitsthat
areexceptional,andtherailroadsshouldermostofthecosts--estimatedtobenearly$2.3billionin
2017.Andhealthcarecostscontinuetoriseatapacethat'shigherthantherateofinflation.
Railunionemployeespaylessinout-of-pocketexpensessuchasco-payments,deductiblesandcoinsuranceandgetfarmoregenerouscoveragethanthevastmajorityofAmericanworkers.Infact,
out-of-pocketexpensesforrailunionemployeesreflectonly7percentofthetotalcostsofthehealth
careprovided.That'sabouthalfofwhatmostemployeesinotherindustriespayinout-of-pocket
expenses.UsingthefourtiersofhealthcareidentifiedundertheAffordableCareAct(ACA)--bronze,
silver,goldandplatinum--thehealthcarevalueprovidedbytherailroadplanexceedseventhemost
valuable"platinum"coveragetier.Thefederalgovernmenthaslabeledthesehigh-valueplansas
excessiveandsubjecttotaxation-theso-called"CadillacTax"thatisplannedtotakeeffectin2020.
TherailroadplanranksequallyhighwhencomparedagainsttheKaiserFamilyFoundation's2016
EmployerHealthBenefitsSurveyandothersurveysonthesharingofbenefitcostsinAmerica.
Accordingtothatdata,onaverageintheU.S.acrossallindustries,workerspay27percentofthe
totalcost(acombinationofout-of-pocketexpensesandemployeehealthpremiumcontributions)for
thefamilyhealthcarebenefitstheyreceive.Bycontrast,railroadworkerspayonly21percentoftotal
costsonaveragefortheirfamilyhealthcarebenefits.
HealthCareCostsinContext
Whileindustryhealthcarecostsareincreasingdramatically,freightrailroadsarecurrentlyfacingthe
financialimpactofasustainedindustrialrecession.Seismicshiftsincoaltransportationandmarket
headwindsimpactingcrudeoil,internationalintermodalandothercommoditieshadasignificant
impactonrailvolumesandrevenuesin2016.
OverallfreightvolumeshandledbyU.S.railroadsin2016weredownabout5percent,accordingto
theAssociationofAmericanRailroads(AAR),withcoalvolumesdownnearly20percentyear-over-
year.Mostexpertsbelievethedeclinesincoalreflectastructuralshiftintheenergymarket,andthat
coalvolumeswillneverreturntopreviouslevels.
Atthesametime,therailroadshaveentirelybornetheimpactofincreasedcostsfromhealthcare
reform-aburdenthatwillcosttherailroadindustryapproximately$648millionbetween2011and
2018.ACA-relatedcostscouldriseevenmoredramaticallystartingin2020,whentheACA'sso-called
"CadillacTax"takeseffectonhigh-costemployerhealthcareplanssuchastherailindustry'scurrent
plan.
APathForward
Healthcarebenefitsforrailroadunionemployeesarefarmoregenerousthantypicallyprovidedunder
plansoflargeemployersoutsidetherailroadindustry.Atthesametime,thecosttotherailroadsof
maintainingthesebenefitsisimmenseandgrowingwhiletheemployeeshareisdecreasing.
Duringthecurrentbargaininground,therailindustryhasoutlinedreasonablereformstobenefit
design--includingadjustmentstoco-pays,coinsuranceanddeductibles,andemployeecontributions.
Thesechangeswouldhelpbringtherailroadhealthcareprogramsandexpendituresclosertowhat's
typicalinotherU.S.industrieswhilestillprovidingexceptionallyvaluablebenefitstoemployees.
Thesechangesarenotsimplyaimedatshiftingcostfromthecompanytoemployees,butreducing
theoverallcostofcare.Thisisachievedbyencouragingemployeestoapproachhealthcareasthey
dootherconsumerpurchases--forexample,usingtheappropriateplaceofcare,suchasanurgent
carecenterinsteadofanemergencyroomwhenpossible,orgettingtheappropriatepreventive
screenings.
BNSF,likeotherrailroads,iscommittedtoprovidingemployeeswithcompetitivehealthcarebenefits.
Ifproposalsbytherailindustrytoadjusthealthcarecostswereimplementedtotheindustry'splanin
thenextroundoflabornegotiations,railemployeeswouldstillreceivebenefitsthatfarexceedthe
nationalaverage.
Asnoted,therailindustryproposalincludesincentivesandprogramsfocusedonencouraginglifestyle
choicesanddecisionsthatcanhelpcontrolindividualhealthcarecosts.Accordingtothelatest
numbersfromtheU.S.CentersforDiseaseControlandPrevention,chronicdiseases,suchasheart
disease,canceranddiabetes,areresponsiblefor7ofevery10deathsamongAmericanseachyear
andaccountfor75percentofthenation'shealthspending.
Eatinghealthy,exercisingregularly,avoidingtobaccoandreceivingpreventiveservicessuchas
cancerscreenings,preventivevisitsandvaccinationsarejustafewexamplesofwayspeoplecan
stayhealthy.Aspartofthecurrentbargaininground,aportionoftherailindustryproposalisdesigned
toencouragetherightpreventivecare,whichwillhelpemployeesavoidordelaytheonsetofdisease
whiletheyalsoreducecosts.
Formoreinformationonhealthcarecostsandtherailindustry,gotoraillaborfacts.org.
BNSFHeadquarters
2650LouMenkDr
FortWorth,TX76161-0057