Understanding the Future Health Account (FHA)

• If you are a "second choicer" and chose the old pension plan, you did not get the old medical plan. You've got the Future Health Account (FHA).
• The FHA replaces the old comprehensive insurance plan, which was linked to the actual cost of health care. The new plan makes only a limited contribution toward the purchase of retiree health benefits.
• IBM contributes for only 10 years, between age 40 and 50.
• Once you retire, you must use the fund to purchase all of your health benefits. IBM does not contribute anything once you retire.
• You may only use the fund to purchase health care benefits from IBM. You cannot use the fund to buy a different or more economical plan.
• Once the account is depleted, you must purchase your own health care coverage, which is projected to be $8,000 to $15,000 per year in the future.
• You are now vulnerable to the rising cost of health care in your retirement years, when your income is also the most vulnerable.
• IBM can cancel this plan at any time. Unlike pension funds, there is no legal protection for the FHA fund, so you could lose the entire amount.

Will your benefits run out?

• For many IBM employees, the FHA fund will be depleted before reaching Medicare eligibility.
  
• Read an excellent booklet about the FHA that was researched and written by CWA's benefits analysts, by asking a fellow Alliance member for a copy, or calling the Alliance office, 607-729-4652 to have one mailed to your home.

Is this inevitable?

• No. CWA has negotiated contract provisions with many employers that make retiree health benefits more affordable and at the same time assure retirees continued access to top quality health care. For instance, employers can:
  • Establish a trust to pre-fund retiree health benefits · Transfer excess pension assets (IBM has an $8 billion surplus) to fund retiree health benefits
  • Set generous company contribution limits
  • Delay effective date of retiree premium sharing
  • Protect retiree benefit levels (over)

More Information: Read the In-depth Report

What can you do?

• Pass this information along to a friend or coworker
• Support your fellow employees in our effort to get a secure contract with IBM -- Join the Alliance!

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