Opinion

Health costs’ new reality

A major employer in our region is making big changes in its benefits package. Boeing’s non-union workers are going to pay more for their health insurance. And it’s likely that union workers won’t be far behind.

The news should serve as a dose of reality to private and public employees alike.

According to Boeing Commercial Airplanes chief Jim Albaugh, the aircraft maker pays about 89 percent of total health care costs for employees. The problem is that other major corporations pay less. For example, Lockheed Martin, General Electric and 3M pay about 70 percent of the employee health bill.

Worse, employee health care costs, which are estimated at $2.4 billion this year, are expected to rise to as much as $3.1 billion by 2015.

Taken together, Albaugh says, and it “adds about $2 million to the cost of every airplane we build.”

Ouch.

The news that employees are being asked to pay a greater share of their health care costs shouldn’t come as a surprise. That’s been the trend for some time now with private companies.

Now that change needs to be understood by union employees of private business and government workers.

At Boeing, as with many large employers, contract agreements govern wages and benefits. But make no mistake – what worked in the past isn’t likely to fly in the future. As Albaugh noted, health care cost increases “will be discussed as those contracts are renegotiated.”

What Boeing, other large companies and even government officials understand is that there is a major change coming because of the recent Health Care Reform Law passed earlier this year. Those companies and governments giving Cadillac health plans to their workers could be subject to a substantial tax.

Boeing’s non-union workers will find out next month what the company’s new health care plans will cost them.

Boeing’s union workers should pay attention.

The International Association of Machinists (IAM) and with the Society of Professional Engineering Employees in Aerospace (SPEEA) will bargain new contracts in 2010. What they see on the non-union side is likely what they’ll get.

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