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Originally published October 18, 2010 at 10:00 PM | Page modified October 19, 2010 at 8:53 PM

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Boeing raises health-plan costs for most nonunion workers

Boeing will require 90,000 nonunion workers to pay significantly more for their health plan next year, but the changes won't affect nonunion employees in Charleston, S.C., who will keep a plan comparable to that of union workers in Puget Sound factories.

By Seattle Times staff and news sservices

Boeing will require 90,000 nonunion workers to pay significantly more for their health plan next year.

However, the changes for nonunion employees will not apply to Boeing workers in Charleston, S.C., who will retain a plan equivalent to that of union workers in the Puget Sound-area factories.

For the affected employees, deductibles — the share of medical costs that employees pay annually before their plan kicks in — will go up to $300 for individuals, an increase of $100. For families, the new deductible will be $900, an increase of $300.

In addition, Boeing is instituting a co-payment of 10 percent after the deductible has been met. The co-payment will rise to 20 percent in 2012.

Boeing spokeswoman Karen Forte said the company intends to try to make the new plan the norm also for union workers as contract talks come up with each union.

"We're going to try to negotiate similar changes for our unions, too," said Forte.

She said Charleston, a nonunion plant, is being exempted from the changes that take effect in January because it is "a new site."

Workers there build the mid- and rear-fuselage sections of the 787 Dreamliner. And by 2012, Charleston will also operate a final-assembly line for the new jet.

"We just want to have some stability there as we work through program-related issues," said Forte.

Boeing must also have weighed the potential impact on the Charleston work force's attitude to unions.

If the benefits plan had been reduced in Charleston, that could have encouraged workers to revisit their 2009 vote to oust the Machinists union.

That decertification vote was taken last September, just ahead of Boeing's decision to put the second assembly line in Charleston.


In a letter mailed to employees late last week, Boeing cited the new health-care law as part of the reason for the changes.

Still, said Forte, "If this health-care law hadn't passed, would we be making changes to the health-care benefit? Absolutely. For competitive reasons."

Boeing is the latest major employer to signal a shift for its workers as a result of the legislation, which expands coverage to more than 30 million uninsured people and ranks as President Obama's top domestic achievement.

Earlier, McDonald's had raised questions about whether a limited benefit plan that serves some 30,000 of its employees would remain viable under the law.

That prompted the Obama administration to issue the plan a waiver from certain requirements under the law.

Forte said the Boeing plan is more generous than what its closest competitors offer, and the company was concerned it would get hit with a new tax under the law.

The tax on so-called "Cadillac" health plans doesn't take effect until 2018, but employers are already beginning to assess their exposure because it is hefty, at 40 percent of the value above $10,200 for individual coverage and $27,500 for a family plan.

"We want to manage our costs so this tax doesn't apply to our plan, but that's down the road," said Forte.

Rick Stephens, Boeing's senior vice president for human resources, said in the letter to employees that out-of-control health-care inflation is hampering Boeing's ability to compete with other manufacturers.

Its major commercial-aviation competitor, Airbus, is based in Europe, where governments shoulder the burden of health-care costs.

Stephens also cited lifestyle issues, such as people who are overweight and who do not adequately exercise, as a the third major reason for the cost shift.

The health-care law ranked second among the three, ahead of lifestyle factors.

The planned changes in deductibles and copays will reduce the value of the Boeing plan, but it's unclear whether that will allow the company to escape the tax looming in 2018.

"It's certainly going to help," said Forte. But "we are still slightly above market in what we offer to our employees."

Material from The Associated Press was included in this report.

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