Utility Workers Union of America
Local 600
AFL-CIO
Representing Office, Clerical,
Technical and Residual Employees
Utility Workers Union of America
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April 21, 2005
Mr. James Anderson
Re: Medical and Dental Benefits
Dear Mr. Anderson:
During the negotiations for the 2005 labor agreement, representatives of the Company and Local 600 of the Utility Workers Union of America (the “Union”) discussed the escalating cost of healthcare and the need to provide medical and dental benefits for Cinergy employees who are members of the Union.
During the discussions, the parties agreed to the following for the term of the 2005 – 2008 Contract.
1. From January 1, 2006 through December 31, 2008, the Union members will have access to the medical and dental coverage options set forth in the attached Exhibit “A” (“Healthcare Coverage”). This Healthcare Coverage will be provided pursuant to the terms of the Cinergy Corp. Welfare Benefit Program, with benefit levels no less favorable than those outlined in Exhibit “A”, attached hereto.
2. From January 1, 2006 through December 31, 2006, the Union members will be provided a subsidy equal to 87.5% of the premium (calculated using standard actuarial procedures) applicable to the Healthcare Coverage of the Union members and their eligible dependents. From January 1, 2006 through December 31, 2006, the Union members will pay 12.5% of the premium (calculated using standard actuarial procedures) applicable to the Healthcare Coverage of the Union members and their eligible dependents.
3. From January 1, 2007 through December 31, 2008, the Union members will be provided a subsidy equal to 85% of the premium (calculated using standard actuarial procedures) applicable to the Healthcare Coverage of the Union members and their eligible dependents. From January 1, 2007 through December 31, 2008, the Union members will pay 15% of the premium (calculated using standard actuarial procedures) applicable to the Healthcare Coverage of the Union members and their eligible dependents.
4. The Company has agreed to provide the Union members with a medical premium “holiday” in January 2006. During this one month, the Company has agreed to forgo the employee’s contribution for medical premiums for the first two paychecks the employee receives in January 2006.
5. As described in Exhibit “A”, several changes are identified to the healthcare coverage in 2006 and 2008. As part of these changes, the deductibles and out-of-pocket maximums for the UHC PPOs have increased. The deductible and out-of-pocket maximums apply to the employee’s portion of medical services requiring co-insurance (%). The deductible is the amount an employee has to pay before the plan pays any benefit. The out-of-pocket maximum limits the amount of medical expenses the employee will incur in one year for items such as the deductible and other co-insurance excluding co-payments.
If the employee is providing coverage for one additional dependent, the deductible and out-of-pocket maximum will apply to each individually. The family deductible and the out-of-pocket maximum do not apply.
It is the parties’ desire that implementing the above-described medical and dental plan features which will help to mitigate future cost increases for healthcare while continuing to provide comprehensive medical and dental coverage for Union members.
Very truly yours,
John E. Polley |
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