Links Of Interest

Retiree Connection Home
	Delta Pioneers
	DECU
	DeltaNet Access
	Retiree Links
	Contact Us

The open enrollment period for 2005 healthcare benefits is scheduled for the end of October.  I want to share with you some information which will help you prepare to make informed decisions about this very important part of your benefit package.  

You have heard much recently about the unprecedented challenge our company faces, our precarious financial situation and the need to achieve lasting and significant reduction in our cost structure to achieve viability for the future.  As has been the case for years, healthcare costs have continued to rise by double-digit percentages, averaging approximately 12% this year with no significant relief projected for next year.  In the context of Delta’s current situation, we must take additional steps to control these costs within the alternative coverage (PilotFLEX) offered to you as a retired Delta pilot.  We will do so both by increasing the amount you pay if you elect to enroll in that plan, as well as through innovative plan design and administration. Benefits under the Delta Pilots Medical Plan are, of course, one of the subjects addressed in the Company’s mid-contract proposal to ALPA.  

 Increased Cost Sharing

For 2005, retirees and survivors who choose to participate in the alternative coverage will see increases in premiums as well as adjustments to some copays, deductibles and out-of-pocket maximums in the UHC alternative healthcare options as follows:

• For those pilots and survivors who are currently paying a 10% premium, that premium will increase to 22%.  This change will generally align the basic retiree premium with the amount that active PilotFLEX participants will pay for healthcare coverage in 2005.

• For in-network services, increases to some copays and deductibles under the Standard and Enhanced Medical Options.

• For out-of-network services, adjustments to some deductibles, reimbursement rates and out-of-pocket maximums.

• For prescription drugs, adjustments to some copay levels under the Standard, Enhanced and Out-of-Area Medical Options.

 Further information about these changes is contained later in this brochure.

 Plan Design and Administration

We continue to seek innovative ways to reduce costs through changes in the way we design and administer the alternative healthcare plans, so that we lessen the cost we must ask you to pay if you enroll in those options.  It is important to understand that, as is typical for companies our size, Delta self-funds the majority of our healthcare benefits rather than buying insurance to cover these costs.  Every dollar of every claim is paid either from a trust funded by Delta or by you -- in the form of copays, deductibles, coinsurance and premiums.  In this respect, we must work together to encourage and ensure prudent and cost-efficient use of our healthcare benefits.  Several ways we are accomplishing that are:

• The Dependent Eligibility Review, which began in the spring of this year, will help ensure that we are providing these costly benefits only to those eligible to receive them.  The review is nearly complete and has resulted in more than 7,000 ineligible dependents being removed from coverage.  This action alone will save more than $13 million in 2005, which includes the cost of the review.

• The Disease Management and Health Advocate programs we introduced last year in the UHC Standard, Enhanced and Out-of-Area Medical Options are working and are on track for saving more than $10 million this year while providing improved care management for those with significant health issues.  In 2005 we will continue to introduce further programs designed to assist our alternative health plan members struggling with complex illnesses.

• For UHC participants in Standard and Enhanced Medical Options, in 2005 we will switch to the Choice Plus network of providers.  Doctors who participate in this network have agreed to provide services at more steeply discounted rates, which lowers Delta’s costs as well as what you pay in coinsurance for the services you use.

Working together in these ways, we are able to significantly reduce our costs.  In addition, we have been able to provide several additional improvements to the alternative options:

• UHC Standard and Enhanced Medical Option members will no longer be required to designate a PCP.

• Those who wish will be able to designate a “Benefit ZIP code” allowing them to participate in an HMO that might not otherwise have been available to them.

2005 Open Enrollment

Prior to Open Enrollment your benefits enrollment package will be mailed to you.  Included in the package will be your enrollment guide with your 2005 premium amounts and accompanying brochures detailing your benefit options.  Open Enrollment will begin on October 27th and end at midnight EST on November 10th.  Once again, retirees will be offered the option of the online open enrollment tool accessible through DeltaNet.  Unlike last year, however, for 2005 Open Enrollment, you must have a Delta Passport password to access the Open Enrollment system.  This is the same password used to access TravelNet.  If you prefer, you will still be able to make your elections via the phone VRU system.  VRU enrollment, using your HR Multi-purpose PIN, continues to be the only option for survivor enrollees.

The changes outlined above are significant to be sure.  They reflect both the precarious state of Delta’s financial health and continued healthcare cost inflation.  Even after these changes, Delta will continue to invest millions of dollars to provide you healthcare benefits that are competitive both within our industry and among companies our size throughout the United States.  Our 2005 alternative healthcare plan will continue to provide excellent protection against significant healthcare costs that can strike any of us or our families at any time.  At the same time these changes represent an important step toward Delta’s goal of achieving viability for the future.