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UPS Union Issues
Healthcare cost raised for the retired
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<blockquote data-quote="Mugarolla" data-source="post: 2096416" data-attributes="member: 8481"><p>It wasn't an insult. I expected someone who didn't know any better to ask a dumb question. I believe you are smarter than that and do know better. But from your response, you still don't seem to get it.</p><p></p><p>You are correct in the terminology. I was just trying to keep it simple in terms of insurance "premiums."</p><p></p><p>You are also correct in that UPS was responsible for ALL the claims. </p><p></p><p>I am going to assume that you understand that the bigger the "pool" (participants covered under a single plan) the cheaper the premium.</p><p></p><p>The main reason for this is not the negotiated discount for a huge pool. The main reason is that not everyone uses all the money paid on their behalf in premiums. Actually, the majority don't.</p><p></p><p>Insurance companies have to stay in business, and this is why they can afford to pay hundreds of thousands of dollars for one person and still remain viable. They make money on most people.</p><p></p><p>There is a formula for the premiums based on many factors, including the size of the pool.</p><p></p><p>With a huge pool, UPS was able to pay all the claims with the money collected from the retirees and from the money not paid to the Teamsters (CSH&W) in premiums (negotiated contribution rates.)</p><p></p><p>They were able to keep the retirees at the $50/mo due to the huge pool of participants. You see, the retirees were included in this pool. They lost money on the retirees but made money on the actives. It all balanced out.</p><p></p><p>Now, lose 95% of the pool, leaving only the retirees. A few people at $50/mo is nowhere near enough money to pay all the claims.</p><p></p><p>So UPS has a choice. Start digging into their pockets, or raise the rates.</p><p></p><p>If it was your company, what would you do?</p><p></p><p>And UPS no longer wanted the insurance because it was an uncertain future. They could see themselves paying more in claims than the money saved by not paying the Teamsters a premium.</p><p></p><p>They weren't sure, but did not want to gamble on an unknown expense. They wanted to be able to forcast their expenses without any unknowns. A detriment of going public, having to appease the stockholders.</p></blockquote><p></p>
[QUOTE="Mugarolla, post: 2096416, member: 8481"] It wasn't an insult. I expected someone who didn't know any better to ask a dumb question. I believe you are smarter than that and do know better. But from your response, you still don't seem to get it. You are correct in the terminology. I was just trying to keep it simple in terms of insurance "premiums." You are also correct in that UPS was responsible for ALL the claims. I am going to assume that you understand that the bigger the "pool" (participants covered under a single plan) the cheaper the premium. The main reason for this is not the negotiated discount for a huge pool. The main reason is that not everyone uses all the money paid on their behalf in premiums. Actually, the majority don't. Insurance companies have to stay in business, and this is why they can afford to pay hundreds of thousands of dollars for one person and still remain viable. They make money on most people. There is a formula for the premiums based on many factors, including the size of the pool. With a huge pool, UPS was able to pay all the claims with the money collected from the retirees and from the money not paid to the Teamsters (CSH&W) in premiums (negotiated contribution rates.) They were able to keep the retirees at the $50/mo due to the huge pool of participants. You see, the retirees were included in this pool. They lost money on the retirees but made money on the actives. It all balanced out. Now, lose 95% of the pool, leaving only the retirees. A few people at $50/mo is nowhere near enough money to pay all the claims. So UPS has a choice. Start digging into their pockets, or raise the rates. If it was your company, what would you do? And UPS no longer wanted the insurance because it was an uncertain future. They could see themselves paying more in claims than the money saved by not paying the Teamsters a premium. They weren't sure, but did not want to gamble on an unknown expense. They wanted to be able to forcast their expenses without any unknowns. A detriment of going public, having to appease the stockholders. [/QUOTE]
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