I received several emails this fall from American Airlines employees who were dismayed that American would take up to 120 days to refund the health insurance premiums that the employees have prefunded through the years.
However, a couple of Transport Workers Union locals have posted this message for members on Friday, from American:
?We are working to send the refunds of employee retiree medical prefunding contributions early, and are hopeful to have the checks to employees in December. We anticipate being able to share the mailing date next week, after all of our reviews are complete.?
The employees? pre-funding was American?s way to hold down its costs for retiree health insurance. Back in the 1990s, AA started requiring employees to ?pre-fund? the insurance if they wanted AA to pay for insurance premiums after they retired.
But the new labor contracts do away with AA-paid insurance after retirement. As part of that, American is refunding the money the employees put up over the years to pre-fund the insurance.
So, the employees are only getting their own money back, but it?ll surely be welcome sooner rather than later.
UPDATE: A TWU official elaborated/clarified/corrected the above, by sending me this language from the TWU/AA agreement:
?During the restructuring agreement negotiations, the parties agreed that upon implementation of the changes to the Retiree medical plan program an active employee who currently prefunds for retiree medical will be refunded the employee?s prefunding account (which reflects investment experience), excluding employees who have already received employee prefunding refunds.?
?In addition, the parties agreed that contingent on the successful resolution of the Section 1114 process, as soon as practicable after termination of the Trust Agreement for the Group Life and Health Benefits Plan for Employees of Participating AMR Corporation Subsidiaries (Union Employees), the Company prefunding contributions for each participating active employee, and investment earnings attributable thereto, will be distributed to the employee (subject to applicable tax withholdings and/or excise tax), excluding employees who have already received refunds of their employee prefunding accounts. The refund will be made to the employee no later than 120 days following September 12, 2012.?
By my calculation, 120 days from Sept. 12 would be Jan. 10, 2013.
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