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Notice of eligibility for
additional coverage and benefits from the United Food and Commercial Workers’
Union Local 919 and Contributing Employers’ Food Health and Welfare Fund (the
“Fund”)
As you know, we
ratified a new Collective Bargaining Agreement with your employer on March 7,
2010, at a time when the odds of any health reform passing were very low. Only a few weeks later a federal law did pass
that changed the environment in which health care plans –insured and
self-insured –operate. The requirements
and nuances of the law are still being sorted out. Ambiguities in the law are being addressed by
the regulatory agencies so that health plans can be appropriately managed as
the new law is phased in through 2014.
The newspaper
reporting of the new law has been helpful, but only to a limited extent. The reform act will eventually require all
plans to eliminate any lifetime or annual maximum benefit. In the short run, the reform act requires
plans to eliminate the lifetime benefit limit as of the first Plan Year
beginning August 1, 2011. Annual benefit
limits, however may apply until the year 2014.
While we
celebrate the direction our country is going to address out health care system,
we are also challenged by how to implement the law under prevailing
circumstances. The benefits provided by
the Fund are financed by employer contributions and by the earnings of our
Fund’s reserve. The investment markets
have not been helpful for the most recent years and the recovery of investment returns
is proceeding slowly. The Trustees of
the Fund have no ability to secure additional contributions needed to cover the
increased costs of providing these required additional benefits.
We are
challenged by the additional costs of benefits we must offer (not to mention
the cost of benefits we would like to offer), while contributions are
fixed. This means –as there are limited
options to choose from –that for each additional benefit dollar, a dollar of
savings must be identified.
The Trustees are
requesting a waiver from HHS to preserve the annual benefit limitation now in
place for the part-time plan of benefits to minimize the cost impact of
transitioning to the requirements of the reform act, if that is not granted
there may be no choice to increase deductibles and co-payments required to
obtain benefits. Asking our members to
pay more for their benefits is a last resort, as we (both the union leadership
and the Trustees of the Fund) know that such a course works hardship on our
members.
The Trustees of
the Fund will be required to eliminate the lifetime benefit for the Plan Year
beginning August 1, 2011, as we now read the reform act. To minimize the cost impact of this change, I
(and here I speak for myself) anticipate that the lifetime limit will be imposed
as the annual limit for years prior to 2014.
A transition rule for the year 2011 will need to be applied. The options are being studied. As conclusions are reached, all participants
will be informed of these decisions.
Budgetary issues
are staggering. We are proceeding with
due care to balance the needs of our members with the fiscal realities we face.
We wish you good
health and remain
Sincerely and
Fraternally,
Mark A. Espinosa
President and
Labor Trustee
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