EYEWITNESS LOCAL NEWSCONSTELLIUM RETIREE BENEFITS
from Eyewitness News Online
Constellium Announces Changes To Retiree Health Benefits
Reported by: Jeff Morris
Web Producer: Jeff Morris
Reported: Dec. 19, 2012 3:10 PM EST
Ravenswood , Jackson County , West Virginia
Constellium Rolled Products Ravenswood, LLC announced two changes to retiree health benefits that it said was part of its ongoing effort to improve the long-term sustainability of the Ravenswood plant.
The company said in a news release that changes will allow Constellium to continue offering generous, high-quality coverage to retirees, while at the same time taking steps to control future costs. The changes will have no impact on the actual coverage provided to retirees and will require cost sharing in the near-term - $5 per month in 2013 for Medicare-eligible participants.
Current retirees will begin to participate in cost-control measures much like salaried and hourly employees at the plant. Retirees, however, will participate in cost-sharing at a much lower rate, and without any changes in plan design. Retirees historically have enjoyed health benefits at virtually no cost, much like employees in the plant prior to the recent contract negotiations.
In 2011, the company spent more than $15 million providing retiree health benefits and expects to spend another $15 million in 2012.
The first of the changes places a cap on the subsidy the company currently pays toward the cost of retirees’ Medicare Part B premiums. For 2013, the company will continue to provide $99.90 per person, per month toward retirees’ Part B premium as it did in 2012, amounting to an annual benefit of nearly $2,400 per year for a retiree and spouse.
However, beginning in 2013 Medicare-eligible retirees will be responsible for any Part B premium increases above this amount, as set each year by the federal government. The government just announced an increase of $5 per month for the 2013 Medicare Part B premium, meaning that the annual cost of premiums would total $120 per year for a retiree and spouse after the company’s subsidy of $2,400.
The second change extends the following annual benefit caps to almost all retirees: (1) $13,007 on average per participant for retirees younger than age 65; and (2) $5,764 on average per participant for retirees age 65 and older. These caps already apply to individuals who retired after Jan. 1, 2003. This means a retiree and spouse under age 65 can on average receive more thanr $26,000 per year in health benefits. For retirees and spouses age 65 and older, this amount on average is more than $11,500 plus almost $2,400 in company-reimbursed Medicare Part B premiums. To date, neither of these cap levels has been reached and no contributions have been required.
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