8.18.24 – 2024 Tentative Agreement Update #9: Retroactive Pay and Your 401(k)/RHRA FAQ’s

Sunday, August 18, 2024

2024 Tentative Agreement Update #9
Retroactive Pay and Your 401(k)
Retiree Healthcare Reimbursement Account (RHRA)

In this hotline:

• Retroactive Pay and Your 401(k)
• RHRA: Frequently Asked Questions
• Base Visits and Virtual Town Hall Schedule
• Virtual Town Halls 1-3 Now Available
• TA Website and Voting Info.

Retroactive Pay and Your 401(k)

Retroactive pay will be distributed for all 401(k)-eligible earnings pay statements. Retroactive pay is calculated based on a percentage of all 401(k)-eligible earnings paid during the eligible time period.

To be eligible for retroactive pay, you must meet the following criteria:

• You received wage pay statements as a Flight Attendant during the eligible time period.
• You are on the Flight Attendant system seniority list on the effective Date of Ratification.
• You are employed by American Airlines as a Flight Attendant on the payment date of the one-time ratification bonus.

You may choose to deposit up to 100% of your retroactive pay into your 401(k), but please take into account the IRS contribution limits. In 2024, the 401(k) IRS contribution limit for employee contributions is $23,000. If you are 50 or older, you can make an additional $7,500 in catch-up contributions, increasing your employee contribution limit to $30,500.

Retroactive pay increases are categorized as supplemental wage withholding by the IRS. The current rate for withholding supplemental pay is a flat 22% for amounts up to $1 million for the year. For additional tax-related queries, it’s best to seek advice from a tax professional. The one-time payment for eligible Flight Attendants will be issued within sixty (60) days after the ratification of this Tentative Agreement.

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RHRA: Frequently Asked Questions

The 2024 Tentative Agreement includes a new option for a Flight Attendant to convert their unused sick hours (at 50% of the retiree’s hourly wage at retirement) to a Retiree Healthcare Reimbursement Account (RHRA). The RHRA may be used to reimburse a retiree’s and/or a retiree’s eligible dependent’s qualifying medical expenses. Flight Attendants will still have the option to be paid $8.65 per hour of unused sick hours upon retirement instead of converting those unused sick hours to an RHRA.

Q1: What is a retiree health reimbursement arrangement (RHRA)?

A: An RHRA is a notional account that APFA members and their spouses can use for eligible health care expenses in retirement. These credits can be used for medical, dental, vision, prescription and over-the-counter drugs, post-tax health care premiums, and more.

Q2: How much will go into my RHRA?

The amount of credit to an RHRA for any team member so entitled will be the value of the eligible accumulated hours in your sick leave bank as of the date of retirement multiplied by 50% of your hourly rate at retirement. After 2/1/2025, a 4-month notification will be required for retirees who want to take advantage of the RHRA. Between 10/1/2024 and 1/31/2025, the 4-month notification requirement will be waived.

Q3: What expenses are eligible for a RHRA?

Most medical, dental, vision, prescription, and over-the-counter drug expenses as well as health care insurance premiums are eligible for reimbursement. This means you can submit claims to be reimbursed for insurance premiums you have paid for COBRA or Medicare coverage. A complete list of eligible expenses can be found on the IRS website.

Q4: What expenses are not eligible for reimbursement from a RHRA?

Excluded expenses include but are not limited to life insurance, short-and long-term disability, and hospital indemnity plans. You also cannot be reimbursed for certain healthcare items and services, such as cosmetic procedures, personal use toiletries, cosmetics, and vitamins. More information on eligible expenses can be found on the IRS website by clicking here.

Q5: What happens if I don’t use all of the money by the end of the year?

Your RHRA is available to use until your credits are depleted. If you have money left over at the end of the year, it will still be available the following year.

Q6: What if I die before the RHRA balance has been depleted? 

In the event of your death, a family member or loved one should contact the American Airlines Service Center at Fidelity at 800-354-3412 to report your death. If you have a surviving spouse or domestic partner, an account will be created for them and your RHRA balance will be transferred to that new account for their use. If you do not have a spouse or domestic partner at the time of your death, the remaining RHRA balance will be forfeited.

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Base Visits and Virtual Town Hall Schedule

All remaining Base Visits begin at 10:30 AM and end at 2:30 PM (HBT). Base visit specific locations may be found here.
click image to enlarge

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Virtual Town Halls 1-3 Now Available

August 13, 2024 Virtual Town Hall #3

00:00 – Welcome
01:21 – Reserve (Section 12)
06:38 – Reserve PBS Improvements
07:10 – Reserve Days Off
13:15 – ROTA/D Improvements
17:40 – ASG (Clicks) Indicator Improvements
20:21 – RAP D Improvements
23:12 – Standby Improvements
26:07 – LMCO (Less Than Minimum Callout)
27:47 – Aggressive
29:36 – Pay & Credit
33:28 – Out of Base Standby
34:27 – Satellite Bases
38:34 – Implementation Schedule
44:40 – TA Voting Walkthrough
46:57 – Trip Comparison Calculator
59:46 – Q&A

August 6, 2024 Virtual Town Hall #2

00:00 – Welcome
01:12 – Implementation Timeline
03:55 – Delayed Programming Boarding Pay
09:11 – Delayed Contract Concerns
17:04 – Outcome of TA Vote
23:23 – Boarding Pay vs Wages
32:27 – Inflation & COLA
35:44 – How the TA is Industry Leading
42:00 – Retro Pay Q&A
46:16 – 401(k) & Profit Sharing Q&A
49:55 – Holiday Q&A
50:50 – Compensation Q&A
55:15 – APFA Website Calculators
57:45 – Boarding Pay Q&A
01:03:40 – Sit Rig Q&A
01:08:32 – Hotel Penalty Pay Q&A
01:11:36 – Cartels Q&A
01:13:43 – Deadheading Q&A
01:18:08 – Electronic Communication System (ECS) Q&A
01:23:44 – Reserve High Seniority Bases & Reserve Q&A
01:31:44 – TTS/UBL Q&A
01:33:35 – TTS/UBL Q&A (and Retro Pay question follow up clarification)
01:33:38 – RHRA Q&A
01:40:10 – Attendance Policy Q&A
01:41:36 – Miscellaneous Q&A

July 31, 2024 Virtual Town Hall #1

00:00 – Welcome and Negotiations Process Recap
07:35 – Economics (Joe Burns and Dan Akins)
27:06 – TA Wages & Compensation  (Joe Burns and Dan Akins)
40:43 – Other TA Economic Components  (Joe Burns and Dan Akins)
42:27 – 401k Improvements & Profit Sharing  (Joe Burns and Dan Akins)
49:40 – Implementation Timeline  (Joe Burns and Dan Akins)
56:13 – Next Steps
01:01:53 – Retro Pay
01:07:10 – Boarding Pay & Position Pay
01:10:49 – Holiday Pay
01:11:38 – Compensation for Hotel Delays & Hotel Penalty Pay
01:13:47 – Vacation Pay & Credit
01:15:01 – Protected Work Rules
01:20:40 – PBS, TTS, UBL Improvements
01:27:55 – Pay Protections
01:31:53 – Satellite Bases
01:33:28 – Misuse of Scheduling Systems
01:34:40 – Electronic Communications System (ECS)
01:38:06 – Completed Trip
01:38:57 – Sit Rig & Boarding times
01:42:15 – Voluntary Extension (VE)
01:43:08 – Reserve Pay Above Guarantee
01:50:50 – Reserve Rotation & Scheduling Improvements
02:11:38 – Section 15 Foreign Language Speaker
02:13:10 – Deadheading & Self-Booking
02:15:30 – Deadhead Stand-Up
02:17:30 – Transfers
02:18:50 – IOD & RHRA
02:20:07 – Section 29 Training
02:21:05 – Grievances
02:23:15 – Changes to Commuting
02:24:05 – Crew Rest
02:24:33 – Miscellaneous
02:31:00 – Q&A

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TA Website and Voting Info.

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ONCE YOUR BALLOT IS SUBMITTED, IT CANNOT BE CHANGED OR WITHDRAWN.

If you’re using a shared device, please log out after submitting your ballot.

Have questions or need assistance? 

The 2024 Tentative Agreement call center is open daily from 9 am until 5 pm CT.

(424) 4TA-INFO
(424) 482-4636

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Continue to wear your red WAR pin, red lanyard, and bag tags until we secure the contract we’ve earned.

In Solidarity,

Your APFA Negotiating Committee

Reese Cole
Kelly J. Hagan
Julie Hedrick
Timothy Legeros
Brian Morgan
Wendy Oswald
Susan Wroble
Joe Burns, Lead Negotiating Attorney

[email protected]