What Does 2008 Bargaining Look Like?

What can we expect from Qwest?

Qwest 10(k) Report The Report shows that Management

Retiree Health Care was capped in 2006.

It also states that Qwest will cap Occupational Retiree Healthcare in 2009.

Refer to LOA on page 154 of current CBA.

Qwest 10(k) Report

Expenses: Qwest reported the cost paid for

Pension and Post Retirement Benefits;

2004 $188 Million 2005 $236 Million 2006 $303 Million An total increase of 38%

Qwest 10(k) Report

Qwest states the total cost of booking the amount that retiree healthcare would cost above the caps:

$2.3 Billion

Qwest Health and Wellness Advisory Committee

A contractual Committee that plays an active role in providing oversight for Qwest Benefit Plans.

Looks at Cost Containment

Helping members through the benefit maze.

2006 Health Care Costs

At the End of 2006 total Health Care cost for Medical, Dental and Vision.

$672 Million

COST BREAKDOWN 23,100 Occupational Active Employees:

$207 Million 19,200 Post 1/1/1991 Occupational Retirees:

$164 Million

25,600 Management Active and Retirees: $146 Million

19,700 Pre 1991 Retirees: $155 Million

Totals: 87,600 (38,234 active, 49,366 retirees) $672

Million

What Health Care Cost Monthly for the Active Employees.

Qwest Point of Service Plan:

Single: $450.18

Single+1: $898.37

Family: $1212.82

For 2008 the Post 1990 Retirees Cost will be

POS Plan Non-Medicare Retiree (<65)

Medicare Retiree (>65)

Single $614.77 $254.35

Single +1 Medicare Dep.

$869.11 $508.69

Single +1 Non-Medicare Dep.

$1281.66 $869.11

Family Medicare Dep.

$1299.45 $1281.66

Family Non-Medicare Dep.

$1659.87 $1299.45

Money is the Key

Bargained for Health Care Plans cover 48% of those covered.

AT

55% of the Total Cost.

Primary and Secondary Insurance.

If you are retired and under age 65 Qwest remains your primary insurance.

Once you turn 65 Medicare is primary and Qwest becomes Secondary.

Bill Medicare first.

When Should I Retire?

Frequently we are asked should I retire before or after 2008 Bargaining?

We won’t know until bargaining is concluded.

The variable are too many to consider any that would fit all circumstances.

Retiree Health Care Caps

The Key to affordable Health Care for Qwest Retirees have been the Health

Care Caps negotiated in 1986.

CAPS Table in Place Since 1986

Under Age 65 Adult

$4,960 Total # of adults

(B) X (C)

Child(ren) Students or Handicapped

$2070 Retiree Plus all others covered

(B) X (C)

Age 65 and over +spouse

$2,570 Total Adults Covered

(B) X (C)

It has

It has always been the intention, “with the respect to those retiring

on or after January 1, 1991,” that the company reserved the

right to assess individual premiums….

For any costs above the caps.

Continuation from Contract to Contract

The Letter of Agreement was continued from 1986 through the 2003 Contracts.

In 2005 Bargaining, Qwest pushed to put all actives and Post 1991 retirees on the Qwest Management Health Care Plan.

2005 Bargaining CWA pushed back and kept the

caps from being implemented.

Actives started to pay an annual enrollment

Retiree Life Insurance was limited to $10,000

With Caps in Place

For 2006 Retiree Health Care for “Post 1990 Retirees and future retirees”

Costs above the Caps would have been:

$200 per Retiree per Month

Caps in Place

Using Current Health Care Trends Retirees with Family Coverage by 2009:

$500 to $600 per Month

Actual Costs to QwestCategory Cost Cap # of Retirees Total Cost

Under 65 $4,960 11,256 $55,829,760

Children $2070 1,235 $2,556450

Age 65 & over $2,570 5,880 $15,111,600

Totals $73,497,810

Medicare Part D Subsidy

The amount for those “over 65” would be reduced by $3.5 Million as a rebate for those staying on the Qwest Prescription Plan.

Total subsidy: $11,583,600 Grand Total after Subsidy:

$69,698,810

Booking the Caps

Qwest has already booked the Caps for 2009.

Long Term Cost of Retiree Health Care

$2.3 Billion or Nearly 20% of the Current Value of Qwest Stock.

The Real Issue, MONEY

INCREASING THE CAPS

Each $50 increase in the Caps would cost over $20 Million

So what do we do?

The FIX?

Change Plan DesignWho PaysHow MuchIndexing based on Ability to payCan different Plan Options be

designed with varying levels of cost.

The Process!

These question can only be answered in bargaining sessions with Qwest.

We will attempt to resolve through the Health and Wellness Advisory Committee

between now and August of 2008!