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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