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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Monday, October 6, 2008 Boeing, Machinists divided over 'survivor plan' The union says Boeing's substitution of life insurance for part of the Survivor Income Plan for Machinists' spouses amounts to a takeaway. By Michelle Dunlop Herald Writer EVERETT -- Did Boeing Machinists go out on strike based on bad information? The Machinists stopped building Boeing Co. jets and started picketing the company's factories on Sept. 6. A month into the strike, Boeing and the Machinists still have different takes about certain aspects of the company's final contract offer. The two sides have not scheduled new talks since the work stoppage began. Machinists' leaders, in urging their members to reject Boeing's offer, said the company's three-year contract offer didn't meet Machinists' demands on wages, health care, pension and job security. On the strike lines, Machinists give individual reasons for voting down the deal. Two major points of contention involve survivor benefits for pensions and the company's mandatory prescription drug program. "I think it's unfortunate if people are striking over an issue that isn't an issue," Boeing spokesman Tim Healy said in an interview last week. The two sides agree that one misconception is wrong: Boeing has not eliminated the survivor benefits on pension. However, the company and Machinists dispute how Boeing handled the Survivor Income Plan, a program separate from pension benefits. The survivor plan, which was written into previous contracts, includes a "transition benefit" for Machinists' spouses. The widow or widower of a Boeing Machinist would receive $210 monthly for the 24 months after the union member's death, for a total of $5,040. The second portion of the Survivor Income Plan, called the bridge benefit, takes effect after those first 24 months have passed. It only applies if the surviving spouse was 50 years old at the time of the Machinist's death and has not remarried, has not reached the age of 62 or does not receive full benefits from Social Security. If the widow or widower qualifies, he or she would continue to receive $210 monthly checks until remarrying or reaching 62 years of age. The survivor plan isn't payable to a Machinist's children or other relatives. Boeing did eliminate the plan in its final offer to the Machinists. Instead, it increased the life insurance plan for each Machinist by $4,000, Healy said. The Machinist could designate his or her spouse or another beneficiary to receive the $36,000 life insurance plan, which is paid out in one lump sum shortly after the covered Machinist's death. But Machinists spokeswoman Connie Kelliher said union leaders viewed the change as a takeaway for the members. "That life insurance is so pathetically low," she said. "It's embarrassing." Kelliher noted that other Boeing employees receive life insurance policies of 11/2 times the worker's salary. Healy said the switch had been supported by Machinists during negotiating subcommittees. Kelliher disputed his claim. "The benefits committee didn't like it," she said. How did pension benefits get confused with life insurance or survivor income benefits? The most likely source is the union's eight-page contract summary, distributed to members before the strike and contract vote. Under the heading of Retirement/VIP, after describing changes in pension, the union notes that Boeing "eliminated survivor benefits, which provided a monthly benefit to widows, widowers and orphans until full Social Security kicks in (bridge to Social Security)." The increase in life insurance is listed under the "minor changes" section. Boeing and the union also disagree on how the company's proposal to impose a mandatory generic drug plan is being portrayed. The company suggested a mandatory generic drug program for the new contract. The union, in its summary to members, wrote that Machinists would need to pay the difference between a brand-name drug and a generic drug even if the member's physician prescribed the brand-name medication. It left out that if the Machinist's physician determines the worker needs to use a brand-name drug, the physician can ask for a review with the insurance company. When a physician prescribes a brand-name drug, the Machinist or covered party needs to see if there's a generic equivalent. Machinists who choose to take brand-name drugs, but who could use generics, will be required to pay the copayment plus the difference in cost between the two drugs. "If there's an effective generic available, then they need to pay the difference," Healy said. Boeing says Machinists who really need the brand-name drugs won't be denied coverage. In the case that no generic equivalent for the name-brand drug exists, if the generic isn't effective, if the member can't physically tolerate the generic drug, then the brand-name drug will be covered, Healy said. In those cases, the Machinist pays the brand-name copayment of $15, compared to $5 for the generic. The Machinists believe Boeing's generic drug program is a prescription for increased costs to their members. Even with the appeal process, there isn't a solid guarantee that those who need brand-name drugs will be approved by the insurance company to receive the medication without paying the higher cost, the union's Kelliher said. "The doctor would have to take the time to appeal it," Kelliher said. "It's a roll of the dice whether you would ever get it." Kelliher said a contract should be about guarantees, and Boeing's prescription policy doesn't provide that. "It's a takeaway no matter how you look at it," Kelliher said. Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

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