Verizon Retiree caps are not a new development. The company has had these caps in place since 2008, meaning they have been active for nearly 20 years. 

Key Facts on Retiree Healthcare Caps

1. Caps Are Not New

• Verizon has enforced caps on retiree healthcare contributions since 2008.
• These caps have been pierced before (NYNE), notably in 2020 and 2021.  
• Retirees who retired before Jan 1, 2013 began paying premiums when costs exceeded caps in 2020 and 2021.
• Post-2013 retirees were contributing ($472, $809 +1 and Family), but piercing the cap in 2020 and 2021 didn’t increase the premiums they were paying because the excess above the cap was not higher than their premium contribution they were already paying. 

2. What the Cap Means

• The “cap” is the maximum annual amount Verizon contributes toward retiree medical coverage.
• Retirees pay the difference/excess if their chosen plan exceeds the cap.  

Evolution of the Cap

2008 MOU

• Set fixed annual caps (e.g., $12,580 for Pre-Medicare Retiree-Only).
• Established that when the cost of the pre-Medicare plan options exceeds the Company’s caps, the retiree shall be responsible to pay the excess in the form of premium contributions.

2012 MOU

• Starting in 2016, Verizon must pay the greater of:
  • The 2008 fixed cap, OR
  • The 2015 COBRA rate for the retiree’s plan (e.g., $15,447 for MEP HCP).

2016 MOU

• Eliminated the HCN plan.
• Locked in 2015 COBRA rates as new caps for MEP HCP coverage.
• Each year beginning in 2017, the Company and the Union will discuss, through the ACHC, the design of such medical option(s) for the subsequent plan year with the goal of designing medical option(s) (i.e. Alternative Plans)

2020–2026

• ACHC negotiated alternative plan designs to contain costs under the cap (2020, 2021 and 2026).

As stated above, the 2016 Agreement set/locked in the annual Cap (because it was higher than the 2008 fixed COBRA rate) on the Company’s Contributions towards Pre-2008 Pre- Medicare Retiree Health Care (“Company Caps”) as follows:

·       Retiree:  $15,447

·       Retiree + 1:  $30,893

·       Retiree + Family:  $38,639

Currently Pre-2008 pre-Medicare retirees who retired on or after January 1, 2013 pay the following annual premiums:

·       Retiree:  $472

·       Retiree + 1 and Family:  $809

 Beginning January 1, 2026 the cost of the pre-Medicare MEP HCP will be as follows:

·       Retiree:  $18,211

·       Retiree + 1:  $36,422

·       Retiree + Family:  $45,528

 Resulting in the following cap excesses and annual premium contributions:

·       Retiree:  $2,764

·       Retiree + 1:  $5,529

·       Retiree + Family:  $6,889

The 2016 Agreement also allows the Union to bargain alternative medical options for the Pre-2008 Pre-Medicare retirees when the MEP HCP pierces the Company’s Caps.  The Union, through the Advisory Committee on Health Care (“ACHC”), successfully negotiated three (3) alternative options for Pre-2008 pre-Medicare Retirees for plan year 2026.

 1.    Opt-out of Verizon coverage and enroll in an HRA.  The HRA amount will be equal to the Company’s Caps for the tier coverage you enroll in (Retiree - $15,447, Retiree + 1 - $30,639, Retiree + Family - $38,639).  The retiree will be able to use the HRA to purchase health insurance through an exchange identified by the company and/or eligible out-of-pocket expenses.

2. Elect to enroll in the alternative MEP HCP plan.  This plan uses an alternative network that the MEP HCP plan and has a different plan design

The cost of this alternative plan is significantly less expensive than the MEP HCP plan and results in retiree annual premium contributions as follows:

·       Retiree: $1,180

·       Retiree + 1:  $2,361

·       Retiree + Family:  $2,929

3. Enroll in the alternative Surest Plan.  Surest is a United Health Care (“UHC”) product that is designed to steer participants to providers that have better outcomes based on the rates they charge.  The plan design has no deductible and a range of co-pays for certain services.  The participant would access the Surest website or App to choose a provider based on the applicable co-pay and the provider’s “rating.”  This plan also has no deductible.  UHC has told us that they are willing to host virtual meetings during open enrollment to demonstrate how the product works. 

The cost of this plan results in annual premium contributions as follows:

·       Retiree: $512

·       Retiree + 1: $1,025a

·       Retiree + Family:  $1,259

Please note that information regarding Retiree Caps has been available since 2008. CWA Local 1103 has consistently made all (MOUs) and supporting documents accessible to our membership on our website before any ratification voting on tentative agreements has commenced.

In Unity,

Kevin Sheil

President, CWA Local 1103