Insurance - HL 140 - (2)

Heads up for those on HCTC (like me):  Program of tax credits ends 1-1-2014.

From the HCTC FAQ’s:

8. How long can I receive the HCTC for?
The HCTC is available until January 1, 2014, when the tax credit will expire. Until then, you can receive the HCTC for as long as you continue to receive TAA or PBGC benefits, meet the general requirements, and are enrolled in a qualified health plan.

Editor: In the current belt tightening DC environment, I think it unlikely for a program extension so starting in the Fall of 2013 I will likely be looking for other health insurance options than my current state qualified plan at Anthem which is subsidized by the tax credit. As always, the DPMA and the DP3’s VEBA deserves a fresh look.

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From: evan gost

Date: 9/8/2012 1:15:02 AM

To: Mark Sztanyo

Subject: Response to Denis Waldron's comments in PCN-138

Mark-

Thank you for your continuing contribution of time and effort in publishing PCN.

Please post the attachment in response to Denis Waldron's comments in PCN-138

Ev

Response to Denis Waldron comments in PCN-138: http://pcnhighlife.blogspot.com/search/label/C.%20Insurance

Hi Denis-

In reference to your comments about the recently negotiated changes to the D&S Plan, it is important to point out the following:

1.       Under the old contract, Delta was required to contribute only 4% of free cash flow (up to a maximum of $60 million) as a pay back of the $60 million expended from the D&S Trust for pilot sick leave in the previous year. If Delta’s free cash flow was less than $1.5 billion in a given year, the contribution would not have equaled the previous year’s expenditure of $60 million for pilot sick leave. Therefore, the deletion of the annual expenditure of $60 million from the D&S Trust removes the uncertainty relating to the magnitude of Delta’s contribution compared to the expenditure under the previous arrangement.

2.       It is important to note that the new contract continues to require Delta to reimburse the D&S Plan on a quarterly basis for expenditures relating to disability benefits and life insurance premiums for the former Northwest pilots—a provision that ALPA negotiated during the merger with Northwest in order to protect the assets of the D&S Trust.  The latest form 5500 indicates that, during the Plan year, Delta contributed $79 million to the Plan. It is reasonable to assume that $19 million of that contribution was related to reimbursement for expenditures on benefits of former Northwest pilots.  ALPA’s efforts to maintain this important reimbursement provision certainly is beneficial to the financial status of the D&S Plan.

3.       The 2000 Pilot Working Agreement included a provision that removed the marriage penalty applicable to surviving spouses of pilots who deceased before retiring, but this provision became effective only for deaths that occurred after Sept 1, 2001. A small group of surviving spouses of pilots who deceased before retiring and before Sept 1, 2001, remained subject to termination of their D&S Plan survivor’s benefit if they married.  Removing this marriage penalty was not an issue that ALPA had to embrace.  However, ALPA listened to our argument that the impacted survivors simply would not marry if the marriage penalty remained in place. For all practical purposes, the marriage penalty was not saving the D&S Plan any money. Instead, it was creating a rather cumbersome annual certification of marital status for the small group of impacted survivors.  ALPA was successful in convincing Delta to delete the marriage penalty and allow the impacted survivors to be treated in the same manner as other surviving spouses who receive benefits from the D&S Plan.  For that effort, ALPA should be commended.

4.       Your comment that Jim Haigh did not suffer the loss of any benefits during the Delta bankruptcy simply is not accurate. Upon retirement, Jim’s normal retirement benefit exceeded his disability benefit; therefore, he did not receive payments from the D&S Plan at that time. When Delta terminated the non-qualified pension plans, Jim lost a significant amount of monthly benefits-- the amount that his retirement benefit exceeded his LTD benefit.  Jim not only lost that amount, but he was not compensated for that loss in accordance with the provisions of the non-qualified settlement that was applicable to other retired pilots. 

5.       Events that occurred during the Delta bankruptcy may have soured the view of many retired pilots towards ALPA; however, it must be recognized that ALPA has an important future role in ensuring that Delta fulfills its stated intention of maintaining the D&S Plan indefinitely.  Although the D&S Plan document states that Delta reserves the right to amend the Plan, the Pilot Working Agreement specifies that Delta is required to receive ALPA’s approval prior to amending the Plan. I sincerely believe that ALPA, and specifically the MEC R&I Committee Chairman, Kevin Powell, are advocates for seeing the fulfillment of obligations to the beneficiaries of the D&S Plan.

 Ev Gost, Vice Chairman DDPSA

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