Boeing Commercial Airplanes Chief Jim Albaugh said nonunion employees will pay more for their health care next year, and cost hikes for union members will be part of contract talks in 2012.
Boeing Commercial Airplanes Chief Jim Albaugh told employees in an internal e-mail Monday that “beginning in 2011, nonunion employees will be asked to pay a greater share of their health care costs.”
Health-care coverage for union employees is governed by contract agreements, but Albaugh said cost hikes for them “will be discussed as those contracts are renegotiated.”
“The soaring cost of health care, which for decades has exceeded the rate of inflation, has had a profound impact on our company and our ability to offer superior products at competitive prices,” Albaugh said in his message. “We’ve got to work together to manage these costs.”
Albaugh said Boeing pays about 89 percent of total health-care costs for employees, compared with about 70 percent for companies such as Lockheed Martin, General Electric and 3M.
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Employee health-care costs are estimated at $2.4 billion this year, rising to as much as $3.1 billion by 2015.
Albaugh said that expense currently “adds about $2 million to the cost of every airplane we build.”
The announcement ensures that health-plan costs will be a contentious issue in Boeing’s separate contract talks in 2012 with the International Association of Machinists (IAM) and with the Society of Professional Engineering Employees in Aerospace (SPEEA).
Nonunion employees will learn the details of the 2011 increase through letters to be sent to their homes next month.
Albaugh said the health-care law passed earlier this year will add to the company’s costs over the next several years. He added that the law “in 2018 could subject Boeing to a substantial tax on health-care plans exceeding a certain threshold.”
This is a reference to the so-called “Cadillac Health Plan” excise tax, a provision in the law that was intended to bring down overall heath-care costs by discouraging high-cost plans, and to help fund the health-care overhaul by raising money from the more well-off.
The law imposes a tax from 2018 on for health plans perceived as particularly generous: specifically, those that cost more than $10,200 for single coverage or $27,500 for family coverage.
Boeing spokesman Tim Healy said the company health plans don’t exceed those thresholds now but might by 2018.
Dominic Gates: 206-464-2963 or firstname.lastname@example.org