National Health & Welfare Plan Employee Monthly Premium Increase: Rumors vs. Facts

Published: Jun 3 2016 12:12PM

The BMWED National Division Office, along with many System Division and Federation offices representing brothers and sisters on railroads that are covered under The Railroad Employees National Health and Welfare Plan (The National Plan), have received many inquiries regarding increasing employee monthly cost-sharing contributions (premiums). Many rumors appear to be circulating regarding the monthly premium increase, effective July 1, 2016. Below is a list of “rumors” and “facts” that hopefully provide clarification regarding the July 1, 2016 monthly cost-sharing contribution increase for BMWED members covered under the National Plan.

RUMOR: The employee monthly cost-sharing contribution is increasing June 1, 2016.

FACT: The monthly cost-sharing contribution is increasing, effective July 1, 2016, per Article III, Section 3, Part B, Section 1(c) of the April 25, 2012 National Agreement. 


RUMOR: The monthly cost-sharing contribution is increasing because a new National Agreement was just signed.

FACT: Although the BMWED and the National Carriers’ Conference Committee (NCCC) are engaged in National Negotiations, no new National Agreement has been signed. The monthly cost-sharing contribution is increasing because of Article III, Section 3, Part B, Section 1(c) of the April 25, 2012 National Agreement.


RUMOR: The monthly cost-sharing contribution is increasing to $230 or more per month, effective July 1, 2016.

FACT: The monthly cost-sharing contribution is increasing to $228.89 per month, effective July 1, 2016. Article III, Section 3, Part B, Section 1(c) of the April 25, 2012 National Agreement, caps the employee monthly cost-sharing contribution to the lesser of 15% of the Carrier’s Monthly Payment rate or $230, effective July 1, 2016. 15% of the Carrier’s Monthly Payment rate is the lesser amount and results in a monthly cost-sharing contribution of $228.89 per month beginning July 1, 2016 and continuing through December 31, 2016. 


RUMOR: The monthly cost-sharing contribution is increasing to more than $230 per month, effective January 1, 2017.

FACT: Again, Article III, Section 3, Part B, Section 1(c) of the April 25, 2012 National Agreement, caps the employee monthly cost-sharing contribution to the lesser of 15% of the Carrier’s Monthly Payment rate or $230, effective July 1, 2016, “…unless mutually agreed by the parties during negotiations commencing when this Agreement becomes amendable pursuant to Article V”. In other words, the monthly cost-sharing contribution cannot increase above $230 unless agreed to by the BMWED and the NCCC. Again, although engaged in National Negotiations, the BMWED and the NCCC have neither reached a new agreement nor mutually agreed to increase the monthly cost-sharing contributions above $230 per month. 


As general information, the employee monthly cost-sharing contribution has not increased from $198 per month since January 1, 2010. Furthermore, if not for the $230 cap per Article II, Section 3, Part B, Section 1(c) of the April 25, 2012 National Agreement, 15% of the Carrier Payment Rate for 2017 is currently projected to be approximately $251.50 per month. 

If you have any further questions regarding the July 1, 2016 employee monthly cost-sharing contribution increase, please do not hesitate to contact your General Chairperson or Executive Assistant to the President, Peter E. Kennedy, at (248) 662-2614 or peterk@bmwe.org. 


Link to PDF: National Health & Welfare Plan Employee Monthly Premium Increase: Rumors vs. Facts