What Does 2008 Bargaining Look Like?

1. What Does 2008 Bargaining Look Like? What can we expect from Qwest?

2. Qwest 10(k) Report • The Report shows that Management Retiree Health Care was capped in 2006. • It also states that Qwest will cap Occupational Retiree Healthcare in 2009. • Refer to LOA on page 154 of current CBA.

3. Qwest 10(k) Report • Expenses: • Qwest reported the cost paid for Pension and Post Retirement Benefits; • 2004 $188 Million • 2005 $236 Million • 2006 $303 Million • An total increase of 38%

4. Qwest 10(k) Report • Qwest states the total cost of booking the amount that retiree healthcare would cost above the caps: • $2.3 Billion

5. Qwest Health and Wellness Advisory Committee • A contractual Committee that plays an active role in providing oversight for Qwest Benefit Plans. • Looks at Cost Containment • Helping members through the benefit maze.

6. 2006 Health Care Costs • At the End of 2006 total Health Care cost for Medical, Dental and Vision. • $672 Million

7. COST BREAKDOWN • 23,100 Occupational Active Employees: • $207 Million • 19,200 Post 1/1/1991 Occupational Retirees: • $164 Million • 25,600 Management Active and Retirees: • $146 Million • 19,700 Pre 1991 Retirees: • $155 Million • Totals: • 87,600 (38,234 active, 49,366 retirees) $672 Million

8. What Health Care Cost Monthly for the Active Employees. • Qwest Point of Service Plan: • Single: $450.18 • Single+1: $898.37 • Family: $1212.82

9. For 2008 the Post 1990 Retirees Cost will be

10. Money is the Key • Bargained for Health Care Plans cover 48% of those covered. AT 55% of the Total Cost.

11. Primary and Secondary Insurance. • If you are retired and under age 65 Qwest remains your primary insurance. • Once you turn 65 Medicare is primary and Qwest becomes Secondary. • Bill Medicare first.

12. When Should I Retire? Frequently we are asked should I retire before or after 2008 Bargaining?

13. We won’t know until bargaining is concluded. • The variable are too many to consider any that would fit all circumstances.

14. Retiree Health Care Caps The Key to affordable Health Care for Qwest Retirees have been the Health Care Caps negotiated in 1986.

15. CAPS Table in Place Since 1986

16. It has • It has always been the intention, • “with the respect to those retiring on or after January 1, 1991,” • that the company reserved the right to assess individual premiums…. • For any costs above the caps.

17. Continuation from Contract to Contract • The Letter of Agreement was continued from 1986 through the 2003 Contracts. • In 2005 Bargaining, Qwest pushed to put all actives and Post 1991 retirees on the Qwest Management Health Care Plan.

18. 2005 Bargaining • CWA pushed back and kept the caps from being implemented. • Actives started to pay an annual enrollment • Retiree Life Insurance was limited to $10,000

19. With Caps in Place • For 2006 Retiree Health Care for “Post 1990 Retirees and future retirees” • Costs above the Caps would have been: • $200 per Retiree per Month

20. Caps in Place • Using Current Health Care Trends Retirees with Family Coverage by 2009: • $500 to $600 per Month

21. Actual Costs to Qwest

22. Medicare Part D Subsidy • The amount for those “over 65” would be reduced by $3.5 Million as a rebate for those staying on the Qwest Prescription Plan. • Total subsidy: $11,583,600 • Grand Total after Subsidy: $69,698,810

23. Booking the Caps • Qwest has already booked the Caps for 2009. • Long Term Cost of Retiree Health Care $2.3 Billion or Nearly 20% of the Current Value of Qwest Stock. The Real Issue, MONEY

24. INCREASING THE CAPS • Each $50 increase in the Caps would cost over $20 Million • So what do we do?

25. The FIX? Change Plan Design Who Pays How Much Indexing based on Ability to pay Can different Plan Options be designed with varying levels of cost.

26. The Process! • These question can only be answered in bargaining sessions with Qwest. • We will attempt to resolve through the Health and Wellness Advisory Committee between now and August of 2008!