1. United to Seek Modifications in Medical Benefits for Retirees
Formerly on U.S. Payroll
* United is committed to reaching consensual agreements with its
retirees on shared costs for medical benefits, following procedures
established under section 1114 of the U.S. Bankruptcy Code.
* Changes sought will bring United's medical benefits for retirees
formerly on U.S. payroll in line with those provided by other large U.S.
corporations.
2. HR Call Center Contact Information
* Immediately by phone at: 1-847-700-6062
* Beginning later today, by e-mail at:
[email protected]
* Beginning Monday, Jan. 19, by phone (toll-free within the United
States) at: 1-866-825-4101
3. Questions and Answers
----------------------------------------------------
United to Seek Modifications in Medical Benefits for Retirees Formerly
on U.S. Payroll
----------------------------------------------------
United is committed to reaching consensual agreements with its retirees
on shared costs for medical benefits, following procedures established
under section 1114 of the U.S. Bankruptcy Code. As part of the
company's plan to successfully emerge from Chapter 11 bankruptcy protection,
United said it needs retirees to pay for a greater portion of their
medical benefits. The modifications United will seek will require United's
retirees who were formerly on the U.S. payroll, and retired prior to
July 1, 2003, to pay a greater share of their costs of their medical
benefits.
"Current employees have already been asked to make sacrifices," says
Pete McDonald, executive vice president-Operations. "With this change, we
will bring retiree medical benefits more in line with those available
to current employees and those offered by other large U.S. corporations.
These modifications are among the necessary steps we must take in order
to reorganize successfully and exit Chapter 11 as a profitable,
sustainable and competitive enterprise."
The proposed modifications make the medical benefits of those who
retired prior to July 1, 2003, comparable to the medical benefits now
offered to employees who retire after that date. The proposed changes will
help United create a uniform, cost-efficient medical benefit plan for
all retirees, replacing a current patchwork of many different retiree
health plans now administered by the company. United's proposal will ask
many retirees to contribute a higher portion of the cost of their
medical benefits, and all retirees who retired prior to July 1, 2003, would
see changes to the coverage available under these benefits. Through
this process, United is not seeking any changes to retirees' life
insurance benefits.
As detailed in the Bankruptcy Code, retiree representatives will be
chosen to form an Official Retiree Committee. Retirees may be represented
by the union that today represents their former employee group, if the
union agrees to do so. United will negotiate with these
representatives with the goal of reaching consensual agreement on proposed changes to
retiree benefits that are fair and equitable.
The proposed changes are expected to significantly reduce the costs of
providing medical benefits to United's 35,000 retirees, which will help
ensure our ability to continue to provide these important benefits.
According to a recent survey by the Kaiser Family Foundation, the
percentage of large employers offering retiree medical coverage dropped from
66 percent in 1988 to 38 percent in 2003. Companies that do offer
coverage have increased deductibles and other benefit limits for both their
active employees and their retirees.
----------------------------------------------------
Human Resources Call Center Contact Information
----------------------------------------------------
Retirees with questions about the 1114 process can contact the HR Call
Center in the following ways:
* By phone at: 1-847-700-6062
* Beginning later today, by e-mail at: [email protected]
* Beginning Monday, Jan. 19, by phone (toll-free within the United
States) at: 1-866-825-4101
----------------------------------------------------
Questions and Answers
----------------------------------------------------
1. Why are you revoking medical benefits for United's retired
employees?
This is emphatically not a revocation of retiree benefits. It is a
modification designed to create a uniform, efficient, and cost-effective
medical benefit plan for all retirees. It does so by making the medical
benefits of those who retired prior to July 1, 2003 more comparable to
the medical benefits now offered to employees who retire after that
date. Equally important, we need our retirees to pay a greater share of
the costs of their medical benefits to help reduce the rising costs of
providing medical benefits to our 35,000 retirees. However, we will
continue to maintain this important benefit.
2. Could United exit from bankruptcy without reducing retiree
benefits?
We cannot exit Chapter 11 without an effective business plan and these
modifications are part of an overall business plan designed
specifically to attract financing and achieve a successful reorganization. The
proposed changes are one of many necessary steps we have to take in order
to get our costs in line with the marketplace, reorganize successfully
and exit Chapter 11 as a profitable, sustainable and competitive
enterprise.
3. How much coverage will retirees be losing? How much more will they
have to contribute to their own medical benefits?
The specific impact will be the result of negotiations we have about
our proposed changes to retiree medical benefits with the Official
Retiree Committee. We will establish this committee under section 1114 of
the Bankruptcy Code.
4. Who represents the retirees in the negotiations with United?
As provided for in the U.S. Bankruptcy Code, unions are the presumed
representatives of retirees in this process. It may be the case that
some unions accept the committee representation role while others decline
to do so. If this happens, the unions who accept will serve on the
committee along with representatives nominated by the company for groups
not represented by a union. Committee membership must be approved by
the Bankruptcy Court. Just as we did with active employees, we will
negotiate with these representatives with the goal of reaching consensual
agreement on any proposed changes to retiree medical benefits, as
necessary.
Formerly on U.S. Payroll
* United is committed to reaching consensual agreements with its
retirees on shared costs for medical benefits, following procedures
established under section 1114 of the U.S. Bankruptcy Code.
* Changes sought will bring United's medical benefits for retirees
formerly on U.S. payroll in line with those provided by other large U.S.
corporations.
2. HR Call Center Contact Information
* Immediately by phone at: 1-847-700-6062
* Beginning later today, by e-mail at:
[email protected]
* Beginning Monday, Jan. 19, by phone (toll-free within the United
States) at: 1-866-825-4101
3. Questions and Answers
----------------------------------------------------
United to Seek Modifications in Medical Benefits for Retirees Formerly
on U.S. Payroll
----------------------------------------------------
United is committed to reaching consensual agreements with its retirees
on shared costs for medical benefits, following procedures established
under section 1114 of the U.S. Bankruptcy Code. As part of the
company's plan to successfully emerge from Chapter 11 bankruptcy protection,
United said it needs retirees to pay for a greater portion of their
medical benefits. The modifications United will seek will require United's
retirees who were formerly on the U.S. payroll, and retired prior to
July 1, 2003, to pay a greater share of their costs of their medical
benefits.
"Current employees have already been asked to make sacrifices," says
Pete McDonald, executive vice president-Operations. "With this change, we
will bring retiree medical benefits more in line with those available
to current employees and those offered by other large U.S. corporations.
These modifications are among the necessary steps we must take in order
to reorganize successfully and exit Chapter 11 as a profitable,
sustainable and competitive enterprise."
The proposed modifications make the medical benefits of those who
retired prior to July 1, 2003, comparable to the medical benefits now
offered to employees who retire after that date. The proposed changes will
help United create a uniform, cost-efficient medical benefit plan for
all retirees, replacing a current patchwork of many different retiree
health plans now administered by the company. United's proposal will ask
many retirees to contribute a higher portion of the cost of their
medical benefits, and all retirees who retired prior to July 1, 2003, would
see changes to the coverage available under these benefits. Through
this process, United is not seeking any changes to retirees' life
insurance benefits.
As detailed in the Bankruptcy Code, retiree representatives will be
chosen to form an Official Retiree Committee. Retirees may be represented
by the union that today represents their former employee group, if the
union agrees to do so. United will negotiate with these
representatives with the goal of reaching consensual agreement on proposed changes to
retiree benefits that are fair and equitable.
The proposed changes are expected to significantly reduce the costs of
providing medical benefits to United's 35,000 retirees, which will help
ensure our ability to continue to provide these important benefits.
According to a recent survey by the Kaiser Family Foundation, the
percentage of large employers offering retiree medical coverage dropped from
66 percent in 1988 to 38 percent in 2003. Companies that do offer
coverage have increased deductibles and other benefit limits for both their
active employees and their retirees.
----------------------------------------------------
Human Resources Call Center Contact Information
----------------------------------------------------
Retirees with questions about the 1114 process can contact the HR Call
Center in the following ways:
* By phone at: 1-847-700-6062
* Beginning later today, by e-mail at: [email protected]
* Beginning Monday, Jan. 19, by phone (toll-free within the United
States) at: 1-866-825-4101
----------------------------------------------------
Questions and Answers
----------------------------------------------------
1. Why are you revoking medical benefits for United's retired
employees?
This is emphatically not a revocation of retiree benefits. It is a
modification designed to create a uniform, efficient, and cost-effective
medical benefit plan for all retirees. It does so by making the medical
benefits of those who retired prior to July 1, 2003 more comparable to
the medical benefits now offered to employees who retire after that
date. Equally important, we need our retirees to pay a greater share of
the costs of their medical benefits to help reduce the rising costs of
providing medical benefits to our 35,000 retirees. However, we will
continue to maintain this important benefit.
2. Could United exit from bankruptcy without reducing retiree
benefits?
We cannot exit Chapter 11 without an effective business plan and these
modifications are part of an overall business plan designed
specifically to attract financing and achieve a successful reorganization. The
proposed changes are one of many necessary steps we have to take in order
to get our costs in line with the marketplace, reorganize successfully
and exit Chapter 11 as a profitable, sustainable and competitive
enterprise.
3. How much coverage will retirees be losing? How much more will they
have to contribute to their own medical benefits?
The specific impact will be the result of negotiations we have about
our proposed changes to retiree medical benefits with the Official
Retiree Committee. We will establish this committee under section 1114 of
the Bankruptcy Code.
4. Who represents the retirees in the negotiations with United?
As provided for in the U.S. Bankruptcy Code, unions are the presumed
representatives of retirees in this process. It may be the case that
some unions accept the committee representation role while others decline
to do so. If this happens, the unions who accept will serve on the
committee along with representatives nominated by the company for groups
not represented by a union. Committee membership must be approved by
the Bankruptcy Court. Just as we did with active employees, we will
negotiate with these representatives with the goal of reaching consensual
agreement on any proposed changes to retiree medical benefits, as
necessary.
