Update on Contract Dispute

Six days of hearings held by Presidential Emergency Board 243 (PEB) in the nearly two-year-old dispute between the nation’s largest rail carriers and 11 rail unions over national wages, work rules, and health and welfare benefits ended on October 20, 2011 (for background information, see “Strike Averted – At Least for Now” in October update). In their presentations to the PEB, the unions stressed their position that the UTU agreement did not establish a pattern for the 11 other rail unions that were not a party to that agreement. Each union presented argument, evidence, and testimony regarding major issues of craft-specific importance to its members. The BLET’s presentation sought favorable PEB recommendations regarding: (1) elimination of the entry rate and the two-tiered pay system; (2) adoption of the away-from-home-terminal meal allowance provision contained in the BLET Collective Bargaining Agreement, with CSX Transportation as the national standard; (3) immediately increasing the certification allowance to $10.00 per trip or tour of duty, adjusted for future general wage increases; and (4) improved and enforceable minimum locomotive cab standards. As part of his testimony, BLET National President Pierce provided a detailed explanation of how distributive power is utilized, while playing a video showing the 9-locomotive, 294-car, 3-mile-long “monster train” that Union Pacific operated between Dallas, Texas, and Long Beach, California, in January 2010.

Other joint issues presented by rail labor included: (1) general wage increases greater

than those agreed to in the last round of bargaining; (2) a sixth week of vacation for those with more than 25 years’ service and proration of vacation for those who fail to qualify for the full allotment; and (3) no changes to the health care benefits.

As set forth by the Railway Labor Act, the PEB must render its recommendations within 30 days of the date it was established, which means a decision is due no later than November 6, 2011. At that time, another 30-day cooling off period will begin to give the parties a chance to reach an agreement considering the recommendations of the PEB. The members of the PEB may, however, request an extension of time to render their recommendations. Stay tuned for future updates on this matter.

High Speed Rail Project Underway in Chicago


Officials broke ground on October 10 on the $133-million Englewood Flyover Project, a new bridge designed to reduce train congestion at one of Chicago’s busiest railroad intersections. The project, which is expected to take three years and create 1,500 jobs, was approved in June for a stimulus grant, but U.S. Secretary of Transportation Ray LaHood, who was on hand for the groundbreaking ceremonies, stated that the project still needs additional funding. LaHood said the needed funding will only come from the American Jobs Act proposed by President Obama if it is passed. When the bridge is completed, it will also include space underneath to create a high-speed railroad from Chicago to St. Louis. The project is part of the Chicago Region Environmental and Transportation Efficiency Program (CREATE), a partnership between the state, the city, and the railroads, aimed at untangling Chicago’s infamously snarled railroads where conflicts cause delays across all modes of travel. A strict “Buy America” requirement ensures U.S. manufacturers and workers will receive the maximum economic benefits from this endeavor.

Medicare Part B Premiums for 2012

The following notice regarding Medicare Premiums for 2012 was posted on the Railroad Retirement Board website at http://www.rrb.gov/pdf/opa/pr1111.pdf. 

The standard Medicare Part B monthly premium will be $99.90 in January 2012, an increase of $3.50 for most beneficiaries.

For the past 2 years, most beneficiaries continued to pay a monthly premium of $96.40. This was due to a “hold harmless” provision in the law that prevents Medicare premiums from increasing for most participants if there is no social security cost-of-living adjustment. Since social security benefits will increase by 3.6 percent in 2012, most people will see their Medicare Part B premium increase from $96.40 to $99.90.

Beneficiaries who first enrolled in Part B coverage during 2010 or 2011 paid a monthly premium of $110.50 or $115.40, respectively. As a result, the new standard premium of $99.90 will cause their premium to decrease by $10.60 or $15.50 a month.

Some beneficiaries will continue to pay higher premiums based on their modified adjusted gross income. The monthly premiums that include income-related adjustments for 2012 will be $139.90, $199.80, $259.70, or $319.70, depending on the extent to which an individual beneficiary’s modified adjusted gross income exceeds $85,000 (or $170,000 for a married couple). The highest premium rate applies to beneficiaries whose incomes exceed $214,000 (or $428,000 for a married couple). The Centers for Medicare & Medicaid Services estimates that about 5 percent of Medicare beneficiaries pay the larger income-adjusted premiums.

Beneficiaries in Medicare Part D prescription drug coverage plans pay premiums that vary from plan to plan. Beginning in 2011, the Affordable Care Act required Part D beneficiaries whose modified adjusted gross income exceeds the same income thresholds that apply to Part B premiums to also pay a monthly adjustment amount. These beneficiaries will pay the regular plan premium to their Part D plan and will pay the income-related adjustment amount to the Railroad Retirement Board. The adjustment amount ranges from $11.60 to $66.40.

Tables showing the income-related premium adjustments for 2012 can be found at http://www.rrb.gov/pdf/opa/pr1111.pdf. The Social Security Administration (SSA) is responsible for all income-related monthly adjustment amount determinations.  To make the determinations, SSA uses the most recent tax return information available from the IRS.  For 2012, in most cases that will be the beneficiary’s 2010 tax return information. If that information is not available, SSA will use information from the 2009 tax return.

Those railroad retirement and social security Medicare beneficiaries affected by the 2012 Part B and D income-related premiums will receive a notice from SSA in November 2011.  The notice will include an explanation of the circumstances where a beneficiary may request a new determination.  Persons who have questions or would like to request a new determination should contact SSA after receiving their notice.

Additional information about Medicare coverage, including specific benefits and deductibles, can be found at www.medicare.gov.