Former Aloha Employees on Verge of Losing Medical Coverage

Paul Phillips
Paul Phillips

HONOLULU (KHNL) -- Former Aloha Airlines employees face a frightening thought: no more health coverage. Their medical plan is on the verge of being dropped, as the company is on the edge of going away for good.

That's because Seattle-based Saltchuk is expected to officially take over Aloha's air cargo operations next week. And that could spell disaster for thousands of former Aloha employees.

Once Saltchuk signs the paperwork and takes over, that means Aloha air cargo is done and Aloha Airlines is no longer. And that means their medical plan stops, which means former Aloha employees will no longer be covered.

Aloha Airlines bankruptcy left several thousand people out of a job last month. Now they are on the verge of losing their health coverage.

"For Aloha's case, the law states that once that the group plan is done away with because the company going out of business, then the plan goes away," said Paul Phillips, a former Aloha Airlines pilot.

Right now, they're covered under what's called COBRA (Consolidated Omnibus Budget Reconciliation Act ) insurance, a federal program that allows ex-Aloha employees to continue paying for coverage out of pocket. Hawaii Medical Service Association or HMSA has agreed to continue coverage until the end of the month, but beyond June 1, they're on their own.

"I've had talks with the CFO at HMSA and they are bending over backwards to try and help the employees, because they understand that a lot of this came up tragically and quickly," said Phillips. "It caught a lot of people off guard."

A COBRA family plan runs close to $900 a month, but a family deductible for an individual care plan can be as much as $5,000. Former Aloha employees hope HMSA and Kaiser Permanente will continue COBRA coverage.

"We're not asking for the government to pay for it, offer those plans, at the expense of the participant, without a drop dead date," said Phillips. "Let it continue on as long as the participant is paying the full share."

Bracing for another setback in the Aloha Airlines saga.

A senate bill (SB 69) called the "Keiki Care Plan" which extends health coverage to children of former Aloha employees has passed.  It is on its way to the Governor Linda Lingle's (R-Hawaii) desk for her signature.