A healthy dose of reality

A look at some myths, truths about Boeing's health care expenditure

For the past several years, skyrocketing health care costs have been the norm across the United States—and a topic discussed often in the media and at Boeing. Here's a look at some of the myths that have surfaced about health care costs—along with the realities of the company's health care costs and benefits, and how Boeing is working to manage future cost increases.

Healthy amounts In 2004, Boeing's total health care spending was $1.7 billion. To put that number into perspective, that is enough to do any one of these actions: Buy seven 777-300ERs* or 33 737-700s*     Buy 30 F/A-18 Super Hornets* or 56 CH-47F Chinooks*     Give Boeing Capital Corporation enough equity to finance about $10 billion in new airplane deliveries   * Estimates based on the base list price as of publication date

MYTH:
Boeing had a solid financial year in 2004, so we don't need to worry about health care costs.

REALITY:
In 2004, Boeing's health care spending totaled $1.7 billion—close to the $1.87 billion Boeing reported in net income last year. On a per-employee basis, Boeing's health care costs were approximately $8,582, which is an overall increase of more than 30 percent since 2001. That compares to $6,918 for large U.S. employers, according to a survey conducted by Mercer Human Resource Consulting, a leading global human resources consulting firm. "Failure to address the issue of health care costs will impact our ability to be competitive as a company and to provide employees with the comprehensive package of benefits we've all enjoyed," said Rick Stephens, senior vice president of Internal Services.

MYTH:
As health care costs rise, Boeing passes all cost increases on to employees.

REALITY:
"While Boeing has asked employees to help share a portion of the cost increases through plan design changes or monthly contributions, the reality is that Boeing has absorbed the majority of health care cost increases," said Stephanie Bertholf, director of Global Benefits Policy and Strategy. From 2001 to 2004, Boeing's total health care costs per employee have risen about $2,000. Of that, the company's cost increased $1,675, while only about $325 was passed on to employees through premium contributions.

MYTH:
Boeing employees pay more toward monthly health care premiums than employees at other companies.

REALITY:
In 2004, Boeing contributed approximately 95.6 percent toward the cost of monthly health care premiums, while employees paid about 4.4 percent. That 4.4 percent is about 58 cents each day for individual coverage or $1.74 each day for family coverage. In contrast, according to the Mercer survey, employees at large U.S. companies paid, on average, 29 percent of the cost of their monthly health care premiums in 2004. On a percentage basis, that's more than six times what the average Boeing employee paid. To remain competitive, Boeing's long-term strategy is to bring employees closer to market levels of health care cost sharing.

MYTH:
Boeing isn't actively involved in helping manage health care cost increases.

REALITY:
The company is continually working to ensure that employees have access to quality care at a cost that's affordable. For example, Boeing is fighting health care cost increases by

• Negotiating with and evaluating health plan carriers. Each year, Boeing negotiates hard with its major health plan carriers by challenging proposed rate increases and holding the carriers accountable to performance and service guarantees. The plans are then evaluated on a quarterly basis to ensure they're delivering high-quality care as efficiently as possible.

• Working to improve the health care market. Boeing is active in several national and local organizations of large employers that are working to make a difference in the health care market. Case in point: Boeing is involved with the Leapfrog Group, a national organization of more than 170 companies and organizations working to improve hospital patient safety standards and reduce preventable medical mistakes.

• Providing programs, information and resources to employees. To help employees manage their health and become more informed health care consumers, Boeing provides a variety of programs, information and resources (see box above).

To your health

Here are some resources Boeing provides to help employees manage their health.

• Care management programs. Offered by most Boeing health plans, these programs provide personalized support for people with chronic conditions such as diabetes or coronary artery disease. To learn what your medical plan offers, call your plan through Boeing TotalAccess at 1-866-473-2016. Hearing-impaired callers can access TTY/TDD services by calling 1-800-755-6363.

• www.BoeingWellness.com. This Web site offers employees and their families a reliable source for information about medical conditions, treatment and prescription drugs. Employees and their spouses who complete the Mayo Clinic Health Risk Assessment online before May 31 will each receive a $25 gift card.

• Health and wellness resources. Many Boeing locations offer on-site resources such as fitness centers, Weight Watchers at Work and health screenings. Discounts for health and fitness equipment and services are available through the Employee Discount Program.

• Quit-tobacco program. Boeing provides the quit-tobacco program Free & Clear. This program, free to all employees, spouses and dependents age 18 and over, combines telephone-based counseling with nicotine replacement therapy (when appropriate). Visit http://www.freeandclear.com/boeing on the World Wide Web for more information.

• Employee Assistance Program. This service connects Boeing employees and their families with counseling professionals for help with personal problems or issues. For more information, visit http://eap.web.boeing.com on the Boeing Web.