In order to win our landmark Retirement Benefit Security Program the Union did agree to some health insurance benefit changes, to become effective on January 1, 2005, similar to those negotiated in the rest of the steel and iron ore industry. However, we did preserve our significant rights to monitor and provide appropriate oversight to the selection and operation of a Preferred Provider Organization on both the Marquette and Minnesota Ranges, including the requirement for access to an adequate number of doctors, specialists and Centers of Excellence, including the Mayo Clinic.
Health insurance continues to be one of the most troublesome issues facing both unions and companies in collective bargaining. With double-digit health care inflation, both the Union and CCI have struggled to find ways to make the delivery of health care to our members more efficient, effective, and less costly. The new PPO program, which will replace the current PIB, provides our members with broad access to health care providers while simplifying paperwork and decreasing administrative costs. The stop-loss provision provides that no employee will have total medical program costs of more than $1000 per year or $2000 per family.
Outlined below are the benefits of the active employees’ health plan:
This Summary of Benefits is a brief description of the covered benefits, effective 1-1-2005.
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Benefits |
In-Network |
Out-of-Network |
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Deductible Individual |
None |
$300 |
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Family |
None |
$600 |
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Coinsurance |
90% |
70% after deductible |
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Out-of-Pocket Limits1 Individual |
$1,000 |
$2,000 |
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Family |
$2,000 |
$4,000 |
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Lifetime Maximum |
$5,000,000 |
$5,000,000 |
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Physician Office Visits |
100% after $15 copayment |
70% after deductible |
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Preventive Care Adult Routine physical exams |
100% after $15 copayment |
70% after deductible |
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Routine GYN exams including PAP Tests |
100% after $15 copayment |
70% (lifetime maximum does not apply) |
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Mammograms as required |
100% |
70% after deductible |
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Pediatric Routine physical exams |
100% after $15 copayment |
70% after deductible |
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Pediatric immunizations |
100% |
70% (lifetime maximum does not apply) |
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Emergency Room Services |
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Physician Services |
100% |
70% after deductible |
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Facility Charges |
100% after $40 copay (waived if admitted) |
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Ambulance Service |
100% |
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Hospital Services Inpatient |
90% |
70% after deductible |
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Outpatient |
90% |
70% after deductible |
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Maternity Services |
90% |
70% after deductible |
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Infertility counseling, testing and treatment2 |
90% |
70% after deductible |
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Assisted Fertilization Procedures |
Not Covered |
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Medical/Surgical Services (except office visits) |
90% |
70% after deductible |
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Spinal Manipulations |
100% after $15 copay |
70% after deductible |
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Limit of 12 visits per calendar year |
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Diagnostic Services (Lab, X-ray and other tests) |
90% |
70% after deductible |
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Physical Therapy (Professional) Occupational Therapy (Professional) |
100% after $15 copay |
70% after deductible |
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Limit of 60 visits per calendar year/combined |
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Speech Therapy (Professional) |
100% after $15 copay |
70% after deductible |
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Limit of 20 visits per calendar year |
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Durable Medical Equipment5 |
80% |
60% after deductible |
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Skilled Nursing Facility Services |
90% |
70% after deductible |
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Combined Limit: 100 days per benefit period |
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Home Health Care 3 |
90% |
70% after deductible |
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Limit 30 visits per benefit period |
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Private Duty Nursing |
90% |
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$5,000 maximum per benefit period |
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Hospice Care |
100% |
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Transplant Services |
90% |
70% after deductible |
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Mental Health Services Inpatient |
90% |
50% after deductible |
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Combined limit: 30 days per benefit period |
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Outpatient |
100% after $15 copayment |
70% after deductible |
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Combined limit: 50 days per benefit period |
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Substance Abuse Services Inpatient
|
90% |
70% after deductible |
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Detoxification |
7 days per admission / 2 admissions per lifetime |
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Rehabilitation |
30 days per calendar year / 2 admissions per lifetime |
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Outpatient |
100% after $15 copayment |
70% after deductible |
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50 days per calendar year |
10 days per calendar year |
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Precertification Requirements |
Performed by Member4 |
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1 Copayments and deductibles apply toward out-of-pocket limits. Copayment continues to apply after out-of-pocket limit is reached.
2 Treatment includes coverage for the correction of a physical or medical problem associated with infertility.
3 The Maternity Home Health Care Visit on In-Network Care is not subject to the program copayment, coinsurance or deductible amounts, if applicable. See Maternity Home Health Care Visit in the Covered Services section.
4 You are required to contact United Health Care 7-10 days prior to a planned inpatient admission or within 48 hours of an emergency or maternity-related admission to a hospital. If this does not occur and it is later determined that all or part of the inpatient stay was not medically necessary or appropriate, you will be responsible for payment of any costs not covered.
5 Any hearing aid costing in excess of $2,500 requires Plan Administrator advance approval.
Effective 1-1-2005 employees will have the choice of selecting benefits either through a network or non-network provider. Benefits will be paid according to the schedule below depending on whether or not a network provider is selected:
Vision Care Benefits
|
Service / Product |
Allowance |
Patient Responsibility |
Frequency |
|
Eye Exam and Refraction |
$32 |
In-Network: $0 Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
|
Single Vision Lenses (standard) |
$24 |
In-Network: $0 Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
|
Bifocal Lenses (standard) |
$36 |
In-Network: $0 Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
|
Trifocal Lenses (standard) |
$46 |
In-Network: $0 Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
|
Aphakic/Lenticular Lenses |
$72 |
In-Network: $0 Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
|
Non-Standard Lenses (e.g. photochromatic, polycarbonate) |
Same allowances as standard |
In-Network: Difference between charge and allowance with a 10% discount Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
|
Progressive Lenses |
$41 |
In-Network: Difference between charge and allowance with a 10% discount Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
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Frames |
$24 |
In-Network: $0 - up to $60 retail; Over $60 retail - patient pays the difference between $60 and charge Out-of-Network: Provider Charge |
All ages - once per 24 months |
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Contact Lens Fitting and Prescription |
$20 - Daily $30-Extended |
In-Network: $0 Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
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Standard Contact Lenses |
$48 |
In-Network: $0 Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months |
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Specialty Contact Lenses(1) |
$48 |
In-Network: $0 - up to $75 retail; Over $75 retail - patient pays the difference between $75 and charge Out-of-Network: Provider Charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months
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Disposable Contacts(1) Unlimited |
$75 |
In-Network: $0 (up to $75). Member pays difference, if any, between $75 and provider’s charge |
Under age 19 - once per 12 months Age 19 and over - once per 24 months
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Additional Services or Products - exceeding program frequency Excludes disposable contacts |
N/A |
In-Network: Same amount as allowances described above Out-of-Network: Provider Charge |
As needed |
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Vision Care Options (such as tints, contacts lens solution) |
10% discount |
In-Network: 90% of charge Out-of-Network: Provider Charge |
As needed |
1 One pair of eyeglasses lenses or one pair contacts or unlimited number of disposable contracts (up to $75) is eligible within a benefit period.
Effective 1-1-2005, dental benefits at Empire, Tilden, United and Hibbing will be paid on the basis of usual, customary and reasonable fees, which are updated every six months. Since Metropolitan does not operate a dental network in Michigan or northern Minnesota, employees are free to utilize the dentist of their choice. Below is a summary of the benefit schedule:
Schedule of Benefits
MetLife
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|
Plan Pays |
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Class I Services |
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· Exams |
100% |
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· All X-Rays |
100% |
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· Cleanings |
100% |
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· Fluoride Treatments |
100% |
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· Space Maintainers |
100% |
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· Palliative Treatment |
100% |
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Class II Services |
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· Sealants |
80% |
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· Basic Restorative |
80% |
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· Endodontics |
80% |
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· Non-surgical Periodontics |
80% |
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· Repairs of Crowns, Inlays, Onlays, Bridges, and Dentures |
80% |
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· Simple Extractions |
80% |
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· Surgical Periodontics |
80% |
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Class III Services |
|
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· Inlays, Onlays, Crown |
50% |
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· Prosthetics |
50% |
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Orthodontics |
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· Diagnostic, Active, Retention Treatment |
60% |
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· Limited to Dependent children under the age of 19 |
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Deductibles & Maximums
· $25 per Calendar Year Deductible (excludes Class I Services) per Member not to exceed $50 per family
· Any amount applied to the Deductible for expenses incurred during the last three months of the Benefits Period that did not satisfy the Deductible, will also be applied to meet the next Benefit Period’s Deductible
· $1,000 per Calendar Year Maximum per Member
· $1,000 Orthodontic Lifetime Maximum per Member
· Oral surgery benefits will continue to covered under the dental program.
· Treatment programs begun under the existing dental program will continue under the current maximums, i.e. current orthodontic lifetime maximum of $1800 will apply to any treatments begun prior to 1-1-05.
All services listed on this Schedule of Benefits are subject to
the Schedule of Exclusions and Limitations.
Effective January 1, 2005, prescription drugs will be provided through a prescription drug card and mail order program through Medco Health Solutions according to the schedule below:
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Benefit Provisions
|
In-Network |
Out-of-Network |
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Prescription Drug Benefits |
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Retail, Maximum Supply |
Up to 30 days |
Up to 30 days |
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Retail Prescription Copayments (per Rx) |
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Formulary Generic |
$10.00 |
50% copayment |
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Formulary Brand |
$20.00 |
50% copayment |
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Non-Formulary Brand or Generic |
$30.00 |
50% copayment |
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Mail Order, Maximum Supply |
Up to 90 days |
Not Covered |
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Mail Order Prescription Copay (per Rx) |
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Formulary Generic |
$20.00 |
Not Covered |
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Formulary Brand |
$40.00 |
Not Covered |
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Non-Formulary Brand or Generic |
$60.00 |
Not Covered |
Current Retirees and Those Who Retire On or Before August 31, 2004
All current CCI retirees in Minnesota and Michigan and those active employees at Hibbing, Empire and Tilden who retire before August 31, 2004 will be enrolled in the existing PPO program effective January 1, 2005. Generally, this plan provides for 100% coverage for services provided inside the network as opposed to the 90% coverage (with a $1000 annual maximum) provided in the plan for future retirees. Please see your current PIB for an outline of that benefit structure as compared to the new program for employees who retire on or after September 1, 2004.
All current CCI retirees in Minnesota and Michigan and those active employees at Hibbing, Empire and Tilden who retire before August 31, 2004 will also not be required to make the 15% monthly contribution toward their Basic Health Insurance Plan, nor will they be subject to the calculation of the so-called “OPEB cap”. The estimated monthly cost of the 15% contribution is $17 per Medicare-eligible participant and $24 for non-Medicare eligible participants..
The “OPEB cap” (otherwise known as the Other Post-retirement Employee Benefits’ cap) is an accounting mechanism used to calculate the overall cost to a company of providing retiree health insurance benefits. In the recent steel and iron ore contracts negotiated with other companies the “OPEB cap” shifts the cost of health insurance inflation from the company to the retirees. For instance, US Steel retirees will start paying the cost of medical inflation starting in 2006.
At CCI the Union was successful in negotiating an agreement that the “OPEB cap” will not apply to current retirees. Thus, current retirees and those that retire prior to August 31, 2004 will be protected from the effects of medical inflation. For employees who retire after August 1, the “OPEB cap” will not go into effect until January 1, 2009, after the Union returns to the negotiating table in 2008.
Future Retirees and Those Who Retire On or After September 1, 2004 from Hibbing, Empire and Tilden
Medical Benefits. Future retirees (which means those who retire on or after September 1, 2004, will be enrolled in the new PPO program with the same benefit structure as active employees. Please refer to the schedule of medical benefits on pages 5-7 above.
Prescription Drug Benefits. Future retirees will also be part of a network pharmacy program. Benefits for the network pharmacy will be paid as described below for retail and mail order drugs:
|
Prescription Type |
Retail |
Mail Order |
|
Generic |
40% |
$20 |
|
Formulary Brand |
40% |
$40 |
|
Non-Formulary Brand |
50% |
$60 |
Other Insurance Benefits. Other retiree benefits including life insurance, the optional major medical program, etc. remain unchanged except as regards the monthly premium cost explained below.
Monthly Premium Cost. As part of our effort to secure the Retirement Benefits Security Program, the Union agreed to a program of monthly premiums equal to 15% of the cost of the basic program to each participant. Premiums will commence on January 1, 2005 and will be calculated on the basis of past costs over an 18-month period projected on future trends. Current estimates place this cost at approximately $17 per month per Medicare-eligible participant and $24 per month for non-Medicare eligible participants. Although this cost will be a new expense for future retirees, your committee felt strongly that this premium was a small price to pay to protect the welfare of current retirees and to insure that the retiree insurance program was well-funded in the future.
OPEB Cap. Future retirees (except for Surviving Spouses) will also be subject to the Other Post-retirement Employee Benefits’ cap. The OPEB is the cost of non-pension benefits (primarily health insurance) provided by the Company to retirees. In the case of CCI, the OPEB is currently estimated at in excess of $330 million. The Union agreed that these expenses would be capped for future retirees only commencing on January 1, 2009. This means that the costs of medical inflation for retirees after September 1, 2004 could be born by those retirees starting in 2009. However, the union returns to the negotiating table in 2008, prior to the start of the OPEB cap. The company has also agreed in advance that the Union may negotiate over the effects of this cap in the 2008 negotiations. This agreement is a significant improvement over the agreements at US Steel where the impact of the OPEB cap will go into effect in 2006 in advance of the 2008 round of bargaining.
Again, your committee felt that the postponement of the implementation of the OPEB cap until after the next round of bargaining meant that the Union could deal fairly with the impact of this issue on any retirees who retire during the 2004-2008 labor agreement.