Questions submitted by email and the Committee's Response
Latest Q&A's Added to Top

The answers to your questions can be found in the filings relating to the February 22 approval of the Supplemental Term Sheet, as amended. In light of the Court's approval, the argument that you raise has now been decided, and we are concentrating on assisting those who believe they were misclassified. Nevertheless, a brief explanation of the rationale behind the settlement may help you understand the circumstances better.

The medical claims are to compensate those who have actually incurred damage, and the way you incur damage is by being enrolled and having to pay the higher premium. Those who were not enrolled in 2006 or 2007 have only contingent claims. Retired pilots who have not yet reached 60 have an incentive to enroll after they reach 60 because of the drop in premiums, and that incentive is at least some indication that they may re-enroll. If a retired pilot reaches the age 60 and does not elect Delta insurance even though his premium rates have dropped, there is a high likelihood that he will never enroll and be damaged by the higher premium.

It is not correct to say that you received nothing. An over-60 retired pilot who was not enrolled in 2006 or 2007 gets, instead of zero, a negotiated compromise claim of $2,100 (or $4,200 if his spouse is eligible). All retired pilots, enrolled or not, have the continuing right to enroll in Delta's health care plan each year during the annual enrollment period. All retired pilots who enroll will receive subsidized premiums from ages 60-64. An over-60 retired pilot who enrolls will receive subsidies after they reach age 65 which are unavailable to under-60 retired pilots. (This is not a complete description, please see the Section 1114 Pilot Retiree Committee Agreement Term Sheet dated October 4, 2006, for more information.)

The Committee recognizes that all retired pilots have been impacted by the bankruptcy, and the Committee has tried throughout to strike a fair balance among the interests of its many constituents.

Question:

Is march 12 the final date to object to the ruling ? Or does the change where Delta is recalculating those on Cobra apply to everyone?

I was on Cobra in 2006, retired 2005

Response:

Thank you for your inquiry. With respect to claims for lost medical benefits, March 12, 2007, is the deadline for retired pilots to file proofs of claim if they disagree with the claim scheduled by Delta.

Under the Court's order of February 22, 2007, approving the Supplemental Term Sheet, "the only remaining basis for filing a proof of claim which disputes the amount of the particular claim scheduled by the Debtors is that the applicable claimant has a good faith belief there has been an error with respect to either (i) the personal data used to calculate the claim or (ii) the mathematical calculation of the claim."

Delta has calculated a claim for the employee number shown above and will provide direct notice. For confidentiality reasons we are not disclosing the amount of the calculated claim in this email.

We expect to have a list from Delta in the near future and will post it when we do.

Response:

Thank you for your inquiry. Since we are posting this answer we have redacted potentially identifying information from your question.

We need to be clear on what these "lost medical benefit claims" are really for. As you know, last fall certain changes were made to the amount a retired pilot will be required to pay for Delta's health insurance in the future. Generally, that means that those who choose to enroll will have to pay more than they would have had to pay before the changes were made. Delta was permitted to make the changes, after negotiating with the 1114 Committee, because the Bankruptcy Code allows it to. However, this is not a one-way street: the Bankruptcy Code also provides that anyone who was actually harmed by the changes is entitled to assert a claim against Delta in the bankruptcy case for the monetary value of the harm.

Your question relates to how the monetary value of the harm is determined. It is completely understandable that you would assume that claims would be based on a benchmark like final monthly earnings, but in fact that has nothing to do with it. The calculation measures how much more you will have to pay over your life span for Delta health insurance than you would have had to pay before Delta made its changes. The important facts are how old you are and when you retired (since that may have an effect on the amount of premiums you pay). With that information, we can figure out the difference between the cost of healthcare for the rest of your life before Delta's changes and the cost of healthcare for the rest of your life after Delta's changes. We have to make some assumptions about how much the cost of healthcare is going to go up and how much overall inflation there is going to be. Then, projecting into the future, we can calculate the increase in the total stream of payments you would pay for health insurance from Delta over the rest of your life. That increase is then reduced to present value and expressed as a single number in today's dollars.

In addition to this calculation, there are two things in particular that affect the size of a retired pilot's claim. FIrst, if a retired pilot has a covered spouse, the retired pilot's claim will also include the spouse's claim (which is separately calculated in the manner described above). Second, the service-related premium ("SRP") that used to be charged to retired pilots with fewer than 25 years of service was eliminated as part of the Section 1114 agreement approved last fall. Since retired pilots with fewer than 25 years of service no longer have to pay the SRP, the elimination of the SRP greatly reduces the claims of retired pilots with fewer than 25 years of service.

As a retired underage 60 pilot, I must join the chorus of those objecting to your seemingly irresponsible, grossly unfair allocation of the recently announced Medical Claim. This whole bankruptcy and associated pension termination has been unfair to the entire pilot group, both retired and active.

However, that unfairness has been spread somewhat equally among the various groups. The Medical Claim agreement that your committee fashioned is so fraught with unfairness that it tests the bounds of saneness. It's difficult for me to believe that a group of intelligent people, like yourselves, could come up with a plan that is so inequitable.

Shortly after retiring from Delta 2 years ago, I took another job to support my family in anticipation of losing retirement benefits. My new employer provides excellent health insurance at a much more affordable rate than that available through Delta. This insurance goes away when I quit this job and fully retire in 2-3 years. I have intended all along to opt back into the Delta provided health plan at that time. Since I am currently not enrolled in the Delta plan, my claim was a paltry $4200. When I opt back into the Delta plan, would it not be fair for me to get a $100,000 claim to help pay for the premiums for the rest of my actuarial life? Therefore, the methodology used to determine who got what amount in their claim is terribly flawed and must be corrected.

Worse than the flawed methodology mentioned above, is the possible deceit displayed in keeping this information from us until the enrollment window for 2007 was closed. Keeping that information under wraps, as was apparently done, and not letting us know of the tens of thousands of dollars we would lose by not being enrolled in the Delta plan during 2007, has the appearance of fraud, cronyism, and a gross miscarriage of the trust given you by thousands of retired Delta pilots.

An apology, an admission of the blatant error, and a fair, equitable correction of that error would go a long way to mending the huge rift that has been created. Short of that, it would seem that your collective consciences would haunt you for sometime. For the sake of all of us, please do the right thing and correct this egregious mistake.

Thank you for your comments. They are similar to a number of other comments we have received. Please be assured that the Committee reviews all comments for substance, no matter how colorfully they are presented.

The Committee has encouraged all of its constituents who have objections to formally file them. The main purpose of the objection period is to ensure that all objections are aired. The main purpose of the hearing is to present all positions to the Court for determination. If you have monitored the Committee website you will have seen that some of the objections have led to Delta's discovery of some gaps in its data, and it has responded by fixing those gaps. A number of objections will have been resolved by this data correction before the hearing.

The Committee appreciates and continues to encourage the participation of its more than 9,000 constituents in this important debate. It appears to the Committee that the system is working.

RESPONSE: Thank you for your communications. Mr. Stark's rhetoric does not amount to fact. Please see the postings on the Committee website for accurate information.

The Committee cannot base decisions affecting a group of 10,000 people on the public comments of a few. There is an appropriate forum for this:as described in the settlement motion, any affected pilot retiree has an opportunity to file an objection on or before February 9, 2007, and to be heard by Judge Hardin at the February 22nd hearing.

The DP3 web site has posted lists of employee payroll numbers and the amount of there allowed claim. Some have two claims listed. Are these the claims negotiated by the 1114 Committee for loss of medical benefits?

RESPONSE:Thank you for your inquiry. DP3 has posted the amended schedule of unsecured claims which Delta filed last week. The schedule posted on DP3's website as F(1) has Delta's introductory notes which indicate what those amended schedules cover. The amendments include, among other things, lost medical benefit claims, and those claims were calculated in accordance with the methodology worked out between Delta and the 1114 Committee. The Committee's agreement with Delta has been submitted to the Court for approval. Delta has sent notices directly to each retired pilot concerning that pilot's lost medical benefits claim. The 1114 Committee has nothing to do with the calculation of any other claim which may be listed for a retired pilot.

Question:

Are we getting an unsecured claim for lost medical benefits?

Response: The term sheet between Delta and the Retired Pilot 1114 Committee which was approved last October contemplated that the Committee and Delta would work together to determine the amount of claims resulting from the change in retiree healthcare benefits in Delta's bankruptcy. The Committee and Delta have reached an agreement concerning how to value those claims and Delta is filing a motion to approve the agreement. Since the claims are based on the specific circumstances of each affected person, they vary widely.

Look for a mailing from Delta on this issue in the next few days.

The Retired Pilots 1114 Committee is aware that there are retired pilots situated as you are. Remember that, thanks to DP3's negotiations with Delta, you stand a pretty good chance of recovering some of your lost pension benefits - maybe a lot of them. Remember, also, that the Retired Pilots 1114 Committee is not authorized to deal with pension benefits - the scope of the Committee's authority is laid out at 11 U.S. Code Section 1114.

The HCTC is actually more complicated than your summary, and we recommend that you take a look at Delta's FAQ's:http://www.dlretiree.info/index.htm , as well as the IRS HCTC website, http://www.irs.gov/pub/irs-utl/hctc_program_kit_07-05.pdf. There's also an HCTC Customer Contact Center you can call, 1-866-628-4282.

You are correct that the only HCTC-qualified plan offered by Delta is Delta's COBRA plan. There are, however, a number of other HCTC qualified plans not offered by Delta that may be available to retired pilots who live in the states where they are offered. If a retired pilot age 55-64, who is otherwise HCTC-qualified, has access to such a qualified plan, he may be able to obtain that plan's coverage and take advantage of the HCTC. Please see the IRS HCTC website for more information.

I will try again to explain generally why COBRA is not available here to retired Delta pilots under 60. COBRA is a federal law that is not within the Committee's or Delta's control. Delta makes COBRA available to persons currently enrolled in DPMP when there has been a qualifying event. In this case, the plan's benefits did not change, so the critical qualifying event is a substantial increase in premiums (because for some retired pilots, the percentage of the premium the retired pilot pays has increased). Retired pilots under age 60 are not in this group because they were paying 100% of their premiums and they are still paying 100% of the premiums. It is important to understand that the federal COBRA law directs Delta to look only at the change in what premium you pay, not at the source of your payment for the premium. That is why the fact that your pension payments have been drastically reduced, or even eliminated, does not determine whether or not you are eligible for COBRA. It is understandable that you would tend to link the source of the payment to the benefit being paid for, particularly since you were probably getting your premiums deducted from your pension check. Unfortunately, though, the fact that your pension was the source of the payment is not relevant. What triggers COBRA here is the effective change in the premium, and since your group is not being asked to pay more than the 100% you are already paying, you do not have a qualifying event.

Thank you for your inquiry and for the clarification. You are correct that one of the conditions for a retired pilot to claim the HCTC is that he is receiving a check from PBGC. That is why Delta, at the Committee's request, is holding open the COBRA election period until 60 days after the PBGC starts issuing checks.

Delta is also separately negotiating to see if HCTC can be made available to retired pilots who are not eligible to receive a PBGC check at all; that's the issue the notice referred to. We do not know if Delta will be successful in that effort.

Thank you for your inquiry. The HCTC is a federal tax credit program administered by the IRS, and consequently the IRS makes all eligibility decisions. One of the requirements for HCTC eligibility is receiving a check from the PBGC. Since the only HCTC-qualified plan Delta has is the COBRA plan, Delta is holding open the COBRA enrollment period until 60 days after the PBGC first issues checks. No one knows when that will happen.

HCTC information is NOT mailed to the individual, it is up to the individual to claim it. We think you will find the following IRS website useful in understanding the HCTC and how to claim it:

Thank you for your inquiry. Please be aware that the Committee is unable to give advice to individuals on their individual situations. However, Delta is mailing out medical plan enrollment information this week, so you should be receiving it right about now. The materials will include information specific to your situation, including what coverage's (including COBRA, if eligible) and what premiums are available.

Thank you for your inquiry. Delta is mailing out medical plan enrollment information this week, so you should be receiving it right about now. The materials will include information specific to your situation.

Materials on the DALRC plan were sent out earlier the month. If you have not received them, please contact Marsh & McLennan at the number below.

There's a toll-free Delta number (1-800-MY-DELTA) for questions on Delta plans, and a toll-free number for Marsh & McLennan for questions on the DALRC plan (1-800-923-4461).

Thank you for your inquiry. Delta advises that if you are receiving a monthly pension or disability check from Delta, the cost of your coverage will be deducted from that check. If the cost of your coverage is greater than your check, or you do not receive a pension or disability check from Delta, then you will be billed directly for the cost of your coverage.

If you have further questions about this, please contact Delta at 1-800-MY-DELTA.

Sorry, the date was confusing. We were referring to the notice that starts out "Warning." Delta is now mailing out packages with information on coverage, premiums, and COBRA. You may find the information on the following website helpful with respect to HCTC:

Yes. Please see paragraph IV(D) of the Section 1114 Non-Pilot Retiree Committee Agreement Term Sheet. It is one of the attachments to the Motion to Approve Agreements With Section 1114 Retiree Committees and can be accessed from the Court Filed Documents section of www.deltadocket.com.

Thank you for your inquiry. Delta is mailing out medical plan enrollment information this week, so you should be receiving it right about now. The materials will include benefit and premium information specific to your situation. There's a toll-free Delta number (1-800-MY-DELTA) for questions on Delta plans, and a toll-free number for Marsh & McLennan for questions on the DALRC plan (1-800-923-4461).

The Committee cannot give individual legal advice, so please take this as a generalized estimate of where the Committee thinks you may come out, based on the information provided. For advice on your specific case please consult your attorney or tax/financial advisors.

The HCTC determinations are made by the IRS. It is our understanding that unless the retired pilot is HCTC eligible, his spouse will not be eligible. More information on HCTC can be found at this IRS website:

As to COBRA: In the context of this Chapter 11 case, COBRA should be available where there is a significant increase in premium paid. Those who currently pay 100% of the premium, which we believe includes all under-60 retired pilots, will continue to pay 100% of the premium in 2007, and so they are not COBRA-eligible because they do not experience a significant increase. However, there may be some under-60 retired pilots, or more likely their spouses or dependents, who do experience a significant change in premiums they pay. That may trigger a COBRA right, which could be a lower premium even where HCTC is not available. COBRA eligibility should be addressed in the materials Delta has sent out.

Thank you for your inquiry. Those eligible for the rebate are to receive an amount equal to 16% of the total premium, not 16% of the subsidized premium (the subsidized premium being 51% of the total premium). The net paid by those eligible, after the rebate, would be 35% of the total premium.

I am 58, retired Dec. '04 at age 56. My wife is 61. I am a "zero" like a
lot of others. From what I have read, I will continue to pay 100% of my
healthcare premiums for myself and my wife which has been $908/month
(total for both of us), for the "standard" coverage. The way I read all of
this is that for the DPMP plan for 2007 I will pay about $775 for myself +
more than $775 for my wife due to her age for a total of at least
$1550/month for both of us. I sincerely hope that I am mis-reading the
information.

Answer:

Thank you for your inquiry.  The Committee cannot give individual legal
advice, so please take this as a generalized estimate of where the
Committee thinks you may come out based on the information provided.

Premiums for both DPMP and FCMP coverages are posted on the Committee’s
website.  Please note that the following applies only to the DPMP
coverages, since retired pilots, spouses and survivors who elect FCMP pay
100% of FCMP premiums.

Retired pilots under age 60 will continue to pay 100% of their premiums.
However, since under the new changes it is the actual age of the spouse
that determines premium rate, a spouse age 61 will pay 51% of the premium.
Under that scenario, the total premiums for standard DPMP coverage for you
and your spouse for 2007 would be around $1,170/month.  In addition, a
spouse age 61 will probably be eligible for COBRA, and she may be eligible
for the HCTC (or, if she is ineligible solely because the retired pilot is
receiving no retirement benefit from the PBGC, she may be eligible for a
refund of 16% of the DPMP premiums at the end of the year).  Please see
the “Important Notice” concerning HCTC posted on the Committee website.