Northwest Shifts Some Health Costs to Workers

September 12, 2002 ( - Starting next year, Northwest Airline workers will have to dig deeper in their pockets to pay a larger share of soaring healthcare costs.

Workers will now have to pick up a fifth of their health insurance premiums – more than $2,000 annually for family coverage, according to a published reports.

The beleaguered air carrier told a managers’ meeting this week that it needs to make the move to help stem its mounting losses that totaled more than $264 million during the first half of 2002, the Detroit Free Press reported. Northwest could save about $76 million, the airline claimed.

“We’re doing this because we’re continuing to incur 2002 costs while realizing 1996 levels of revenues and we need to bring our costs in line with expected revenues,” Northwest spokesman Bill Mellon told the Free Press.

Unions representing Northwest 45,000 workers were angry about the move and said they may go to court to block it.

Premium Push

The announcement involves members of two managed-care plans the airline offers. Employees with coverage for themselves and their families would have to shell out more than $2,000 annually. Single workers would kick in more than $700 per year, according to the Free Press report.

Employees can enroll in a traditional health-care plan. That requires the workers to pay a deductible and 20% of the premium costs up to a threshold, after which Northwest must pay the premium.

Northwest contends it has the right to pass on health insurance costs. But one union leader said the airline’s action violates the union’s contract and was taken without first consulting with the union officials.