The coronavirus (COVID-19) pandemic has brought United Airlines, any by our association, each of us an uncertainty that we have never been faced with in our company’s history. As the COVID-19 crisis has evolved, we’ve seen the company begin to take steps to conserve capital resources by reducing discretionary spending and to reduce overall costs. Extraordinary steps have been taken, to date, to avoid the need to reduce employees through an involuntary furlough and many of us have made the sacrifice to take unpaid time away from work while those of us remaining have seen reduced line averages and changes to the development of our monthly flying schedule. All of this is presenting each of us with new challenges.
While all of these actions have contributed to United’s ongoing effort to reduce costs, the reality of the situation is that the spread of the COVID-19 virus is resulting in certain state or local governments imposing restrictions, such as shelter-in-place orders, unpredictably on travelers as well as the residents of their communities. The impact of these restrictions continues to have an adverse impact on overall demand for travel. In recent days we’ve seen new restrictions that are further reducing, even eliminating, demand for travel all of which suggests this situation may require additional action.
Starting Thursday, March 26, and through April 10, 2020, any employee in the U.S., Guam or Puerto Rico can request a voluntary separation from the company and receive enhanced medical benefits and travel privileges through a program known as the 2020 Voluntary Separation Program.
The following are the preliminary details of the program as we understand them.
Q: What is the program referred to as?
A: 2020 Voluntary Separation Program
Q: When is this program available?
A: The program will become available starting March 26, 2020.
Q: Who is eligible to participate in this program?
A: Any employee in the United States, Puerto Rico or Guam, their spouse and/or domestic partner.
Q: What does the program offer?
A: Enhanced Medical Benefits and Travel Privileges
Q: Over what period of time will this program be offered?
A: This is a limited time offer. The enrollment window will be open from March 26, 2020 - April 10, 2020.
Q: Why is United offering this program now?
A: Citing the turbulent circumstances brought about by the current COVID-19 crisis, this enhanced voluntary separation package is being offered to provide employees with some control over their individual path forward during these uncertain times.
Q: Is there a limit to the number of employees to whom this program will be made available?
A: Because United needs to be prepared to cover all operational needs, not only during this time period but when the company begins to ramp up service again, the only thing that might prevent approval of an employee’s request would be if too many requests came from one area of the company.
Q: Are there different eligibility groups? If so, what is eligibility based on?
A: Yes. Eligibility is based on the employee’s age and years of service as of March1, 2020. There are three eligibility groups.
Q: What are the eligibility groups?
A:
| Age | Years of Service with United | Enhanced Medical Benefits | Enhanced Travel Privileges | |
|---|---|---|---|---|
| 1 |
Over age 63 ½ |
Any number of year |
Yes |
Yes |
| 2 |
Under age 63 ½ |
10 or more years |
Yes |
Yes |
| 3 |
Under age 63 ½ |
Fewer than 10 years |
Yes |
Yes |
Q: What if I already have benefits to which I am entitled under our Contract?
A: These benefits are available in addition to any retiree medical benefits and retiree pass travel for which you may already be eligible (e.g. bridge medical, current travel benefits, pension, 401(k).
Q: Can this program be applied to past separations?
A: No, these benefits cannot be applied retroactively.
Q: Was this program negotiated?
A: No. This is a company-wide program offered to all employee groups. You retain access to all negotiated retiree medical benefits and retiree pass travel for which you may already be eligible (e.g. bridge medical, current travel benefits, pension, 401(k).
Q: What is COBRA?
A: COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) is a federal law that requires employers of 20 or more employees who offer health care benefits to offer the option of continuing this coverage to individuals who would otherwise lose their benefits due to termination of employment, reduction in hours or certain other events.
Q: Who pays for COBRA coverage?
A: The employee generally pays the full cost of the insurance premiums plus a 2% administrative fee. In this case, however, United is providing COBRA coverage and a substantial subsidy to reduce the cost to the employee during the period of coverage.
| Group | Medical | Travel |
|---|---|---|
| 1 |
If Not Yet Medicare Eligible Up to 18 months of COBRA medical coverage at active rates. Your monthly cost remains the same as if you are an active employee because United will subsidize the cost of coverage (approximately 80%). Once Medicare Eligible (typically age 65) Provided access to United-sponsored retiree medical coverage for Medicare-eligible retirees including: Aetna Medicare Advantage ESA PPO plan with SilverScript prescription drug coverage. An additional $90 subsidy per month for one year. |
Continuation of active pass travel at your current boarding priority as of 3/1/2020 for three (3) years. Transition to retiree pass travel after three-year period. Employee, spouse/qualified domestic partner, children to age 26, & parents. Extended family & regular buddy passes are also eligible. |
| 2 |
Medical Benefits Up to 18 months of COBRA medical coverage at active rates. Your monthly cost remains the same as if you are an active employee because United will subsidize the cost of coverage (approximately 80%). |
Travel Privileges Pass travel privileges for 15 years. Option to change to retiree pass travel, if eligible, based on age and completed years of service based on your date of separation from the company. Employee, spouse/domestic partner, children to age 26 and parents are eligible for pass travel. Extended family and regular buddy passes are also eligible. |
| 3 |
Medical Benefits Up to 18 months of COBRA medical coverage with the first six (6) months at active rates. Your monthly cost for the first six (6) months remains the same as if you are an active employee because United will subsidize the cost of coverage (approximately 80%). At the end of the six month period, you will have access to medical coverage at typical COBRA rates. That is, the full cost (100% of total monthly cost) of coverage plus a 2% administrative fee. |
Travel Privileges Pass travel privileges for the same number of years as your completed years of service, rounded up for any partial year. Option to change to retiree pass travel prior to end of the program based on age and completed years of service as of your separation date from the company. Employee, spouse/domestic partner, children to age 26 and parents are eligible for pass travel. Extended family and regular buddy passes are also eligible. |
We anticipate additional details on the program as well as the link to submit for the program to be available on March 26, 2020 on the company's website. As more information becomes available, we will share that with you.