September 10, 2004

Time Inc. Proposes 100%-Plus

Increase in Health Costs

Higher premiums for lower-wage workers; co-pays to go up for everyone

Time Inc. has dropped a bomb on the Guild, and on all employees at the company. At a meeting with the Guild on September 1, the company introduced a proposal that would radically increase health-care costs, especially for lower-wage workers.

Detailing the nightmare

The proposals include:

· A 100% increase in the employee’s contribution to the health-insurance premium, from 0.5% of salary to 1% of salary (with an as yet unknown cap on employee contributions, more on that below).

· A number of significant changes in the United Healthcare point of service plan, including, according to the company’s initial proposal:

--All non-office visits (hospital, X-Ray, lab, etc.) would be covered at 90% instead of the current 100%.
--Out-of network reimbursement in the UHC would fall from 70% to 60%;
--Co-pays for specialist visits in the UHC plan would rise from $15 to $20.

· Drug co-pays would skyrocket, increasing as much as 533%. Instead of the current standard co-pays, the structure would move from a “flat” dollar structure to 20% of the cost of the drug, with generic, brand-name and mail-order drugs all having a maximum co-pay of $40. The current $7.50 generic would go to a minimum of $10 and a maximum of $40; brand-names would have a $20 minimum and a $40 maximum. Mail-order (90-day supply) co-pays would be $20 for generic and $40 for brand name.

Some oddities and many questions

Among the oddities of the proposal is a shifting of the cost burden from the wealthier to the less

well-off. At the meeting the Guild pointed out that this would also represent collective cost-shifting

onto Guild-covered employees and away from managers. Here’s why:

· Individual health premiums would double for all lower-wage workers, from 0.5% to 1%, up to a maximum contribution (and wage level) that HR couldn’t specify. What their proposal’s chart did specify was that a $100,000-salaried employee with single coverage would have a cap on their annual premiums of $784.94, a smaller percentage increase than for lower-paid employees.

· Employee + 1 dependent coverage would also double for all lower-wage workers, from 1% to 2%, with a similarly unknown cap for higher-wage workers and a not-quite-2% rate for $100,000 earners.

· Family (employee + 2 or more dependents) coverage would double for all lower-wage workers, from 1.25% to 2.5%, but also would double for $100,000 earners, and their contributions would be the full $2,500. The Guild does not know at what point the Family earnings cap would kick in.

HR did point to the increased Family premiums when the Guild noted that Time Inc. was sparing higher-paid workers the increases that were falling on lower-wage workers.

What Is This All About?

Of course, the Guild will be opposing all of these increases in upcoming talks. The goal of the company is to shift costs onto employees, and the Guild will resist this with all its might.

Be aware, however, that language in our contract does not require the company to negotiate benefit changes with the Guild, but rather specifies only that the company must, “if requested, consult with the Guild before making such amendments or changes.”

The Guild Grievance Committee has started the consultation process with a detailed information request to answer the many questions we have.

Health costs are going up; the struggle is over who is going to pay for them. At the contract-extension talks last year, the company made a big point that it was swallowing the health-care increases and not passing them on to the employees. That was a valid point to make, and the Guild was glad that its employees wouldn’t have health-care increases to rob them of their modest wage increase of 2%.

Can the company reassure us that the non-existent merit raises of 2004 will become real in 2005? Otherwise most of us will receive a reduction in our guaranteed wage increase for 2005 plus increased co-pays and medical fees.

Discussions on the health cuts will continue, and New York Guild President Barry Lipton has told the Guild unit leaders at Time Inc. that he will be joining them.