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Healthcare Provider Update: FedEx's healthcare provider is primarily Cigna, which partners with the company to offer health insurance solutions to its employees through a range of plans, including High Deductible Health Plans paired with Health Savings Accounts. In 2026, FedEx employees may face significant healthcare cost increases, mirroring a broader trend across the nation. With the expected elimination of enhanced ACA premium subsidies, some workers could see their out-of-pocket premium costs surge by over 75%. Coupled with the anticipated double-digit rate hikes from major insurers and rising medical expenses, the financial burden on employees is poised to escalate sharply, potentially impacting their overall healthcare affordability. Click here to learn more
What Is It?
Due to you being an employee at FedEx, let's assume you are a car owner. You're concerned about who will pay your medical bills if you have an accident. You have a personal auto policy (PAP). The 'med pay' portion of your PAP pays the medical expenses for you or your family members involved in a car accident regardless of fault.
The purpose of med pay is to provide payment for immediate medical treatment of people injured in an auto accident without waiting to see who is at fault and ultimately liable. Medical payments coverage is located in Part B of your PAP and contains the following sections: the Insuring Agreement, Exclusions, Limit of Liability, and Other Insurance.
The Insuring Agreement
In General
As FedEx employees and retirees, we don't expect you to be experts on insurance agreements and all their nuances. The insuring agreement is the most important part of each section of your PAP. It sets forth the circumstances under which the insurer will pay benefits to you, or on your behalf, for med pay coverage. Your med pay coverage typically pays reasonable expenses incurred for necessary medical and funeral services because of 'bodily injury' caused by an accident that is sustained by an 'insured.' The benefits of med pay coverage are available up to the specified limit per person.
Time Limit
We feel that it is important to remind all FedEx employees and retirees that there is a time limit factor associated with these types of insuring agreements. The insuring agreement also imposes a time limit after which the med pay coverage is no longer available. The time limit is typically one to three years after the accident. Check your policy for the specific time limit.
Insurance companies impose a time limit on med pay for two reasons: (1) closure--the insurer wants to know what the total payments are in a reasonable amount of time, and (2) protection against fraud--after a number of years it may become difficult to determine whether the treatment requested is for the covered injury or for a later-occurring injury that is not covered. A time limit gives insurance companies some protection on med pay claims.
Definition of 'Insured'
It's crucial that we make the definition of 'insured' very clear for our FedEx clients. Whether a person is insured determines if they are covered under your policy. The med pay section of your PAP has its own definition of 'insured.' It typically defines 'insured' as:
-
You or any 'family member':
- While 'occupying' 'your covered auto'
- As a pedestrian when struck by a motor vehicle designed for use mainly on public roads or a trailer of any type.
- Any other person while 'occupying' 'your covered auto': As in Part A: Liability Coverage, 'you' refers to you as the named insured and your spouse. 'Family member' is defined as any person related to you who lives in your home. 'Your covered auto' is any vehicle that is listed on the Declarations Page of your PAP.
To be covered by med pay, you have to be a person occupying a motor vehicle. The key term is occupying. Not surprisingly, there has been plenty of litigation surrounding the interpretation of that term. Your PAP probably defines 'occupying' as 'in, upon, getting in, on, out, or off' a motor vehicle at the time of the accident.
Med pay coverage is also extended to any pedestrian who is hit by 'your covered auto.' This reflects the no-fault nature of med pay coverage. If anyone is injured by your vehicle, med pay will cover his or her medical bills no matter who is at fault. The definition itself limits coverage to vehicles designed for use mainly on public roads. Therefore, Part B does not provide coverage for injuries inflicted by bicycles and many other types of vehicles.
Exclusions
In the spirit of due diligence, we want to educate all FedEx employees and retirees on the exclusions section of your insurance policy.
In General
The exclusions section of your insurance policy specifically sets out the limitations and restrictions on the coverage provided by the insuring agreement. Your PAP excludes med pay coverage for 11 specific causes of loss. Generally, coverage is excluded to avoid duplication with other, more suitable insurance coverages, for business uses, and to eliminate nonstandard (even catastrophic) risks.
Workers' Compensation
Since many FedEx employees are covered by workers' compensation, we feel it's valuable to mention how Med pay handles injuries that are covered by workers' compensation. Med pay coverage typically will not cover 'bodily injuries' sustained by an insured that is covered by workers' compensation. Workers' compensation is better suited to cover such losses.
Business Use
Generally, med pay will not cover you for 'bodily injuries' sustained while using a vehicle for business purposes. Commercial policies are better suited for that type of coverage. The business exclusions in the PAP include:
- Your PAP will not provide med pay coverage when you are occupying 'your covered auto' as a public or livery conveyance (i.e., transporting people or goods for a fee).
- Med pay excludes coverage for injuries sustained while occupying a vehicle when it is being used in the business of an insured. This exclusion does not apply to injuries sustained in:
- A private passenger auto
- A pickup or van that you own
- A 'trailer' being used with one of the above
Example(s): Hal has a PAP and uses his pickup truck for his job as a copier technician. The job requires Hal to drive from site to site servicing copiers. Hal has an accident and sustains 'bodily injury.' Result: Hal is eligible for med pay coverage under the preceding exceptions.
Nonstandard Risks
It's important for all FedEx employees and retirees to understand that there are some nonstandard risks that your insurer does not intend to cover. Your med pay policy excludes many nonstandard risks that you could subject yourself to. Med pay coverage is excluded for:
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- Unlawful use--Anyone who uses your vehicle without a reasonable belief that they are entitled to do so is not covered (e.g., when a thief or joyrider steals your car).
- Vehicles with fewer than four wheels--Med pay will not provide coverage for any injuries you sustain while 'occupying' a vehicle with fewer than four wheels. Vehicles such as motorcycles present additional risks that your med pay does not intend to cover. You can purchase additional insurance to cover these types of risks.
- Vehicles located for use as a residence or premises--If you are injured in the equivalent of someone's 'house,' your auto insurance isn't really the best place to look for payment. A homeowners insurance claim may be more appropriate. For example, coverage is excluded if you are injured in a trailer that has been set up as a campsite.
- Autos not listed on the PAP--Any auto that you own or that is owned by a family member not listed on your PAP Declarations Page is not covered under med pay. This exception does not apply to you (or your spouse) if you're in a vehicle that is owned by a different 'family member.'
Example(s): Your son Pat owns a car. He is 18, lives with you at home, and has his own insurance. If you take the car for a test ride around the block and have an accident, your medical expenses are covered under your own med pay policy. If Pat's friend, Bobby, has an accident while taking the same test ride, your med pay coverage will not cover him for his medical expenses.
Insurers can calculate risks only on your known vehicles. If a vehicle is not listed on your policy, injuries sustained while using it will not be covered.
- Racing--You guessed it: no med pay coverage when you compete in, practice, or prepare for any prearranged or organized racing or speed contest. If you're a race-car driver you should purchase insurance that is designed to cover the obvious risks of race-car driving.
Catastrophic Exposure
The med pay section of your PAP also excludes coverage for various catastrophic exposures that cause 'bodily injury' to an insured. These are so catastrophic that calling them 'nonstandard risks' just doesn't seem to be appropriate. They are:
- Discharge of a nuclear weapon, a nuclear reaction, radiation, or radioactive contamination (even if accidental)
- War (declared or undeclared)
- Civil war
- Insurrection
- Rebellion or revolution
These exceptions are designed to protect the insurer from a situation in which a large number of claims result from a single catastrophic incident. Although most FedEx employees generally don't need to be concerned with this part of the agreement, it helps illustrate a full picture of the agreement
Limit of Liability
One extremely important thing for FedEx employees and retirees to keep in mind is the Limit of Liability part of their agreement.
In General
Your PAP is not an unlimited source of funds for you to draw on in case of an accident. There are limits to how much coverage your insurer will provide. The limit of liability for med pay coverage is listed on the Declarations Page of your PAP. It can be in any dollar amount but is typically $5,000 or $10,000. This limit is the maximum amount of med pay coverage that will be paid by the insurance company, per person, for any one accident.
Total Per Accident
The med pay limit on the Declarations Page is the maximum dollar amount that the insurance company will pay any one person for any one accident. It's the most the insurance company will pay regardless of the number of:
- Insureds
- Claims made
- Vehicles or premiums shown on the Declarations Page or
- Vehicles involved in the auto accident
The insurance company is responsible for paying up to the specified limit and no higher. That limit does not change depending on how many insureds there are or how many of your covered vehicles are involved in the accident.
No Duplicate Damages
FedEx employees and retirees should know that the insurer will not pay med pay benefits when some other person or organization will do so. The first example of this is when other sections of your PAP cover the loss. You will not receive duplicate med pay payments for the same loss that is covered under Part A Liability, Part C-: Uninsured Motorist (UM) Coverage, or any underinsured motorists coverage provided by your PAP. The same rule applies to duplicate med pay benefits under another person's policy.
Example(s): You are injured as a passenger in Ron's car. You receive $5,000 in med pay coverage from Ron's PAP. Later, it is proven that Ron is liable for your injuries. Any amount you are awarded from the Part A: Liability section of Ron's policy will be reduced by the amount you were paid under the med pay coverage.
Other Insurance
In General
When you're in a car accident, it's likely that more than one auto insurance policy is in effect. The other insurance clause limits your insurer's liability when there is another policy that might also cover your loss. Generally, your PAP insurer will pay its pro rata share of the loss. That share is the proportion that your policy's med pay limit bears to the total amount of any other med pay policies in effect.
Example(s): Ron is a passenger in Tammy's car when she has an accident. Tammy's policy provides $10,000 per person in med pay coverage. Ron is considered 'insured' under Tammy's policy because he's in her car. Let's say that Ron has his own PAP that provides med pay coverage of $5,000. Which policy pays, and how much? The total amount of med pay is $15,000. Each has to pay only their pro-rated fair share of any losses that are less than the total. Tammy's share is two-thirds ($10,000 of $15,000) and Ron's share is one-third ($5,000 of $15,000). So, under the general rule, if Ron's medical bills add up to $6,000, Tammy's insurer has to pay $4,000 (two-thirds) and Ron's insurer has to pay $2,000 (one-third).
The second part of the other insurance clause limits liability even further. When your insurer is providing med pay coverage for a vehicle that you do not own, it will make payment only if the primary med pay coverage on the vehicle is insufficient. In the preceding example, Ron's med pay coverage will have to pay only his medical bills that exceed Tammy's med pay limit of $10,000.
What are the implications of the Funding Target Attainment Percentage for FedEx Corporation employees, and how does it impact the security of the pension benefits offered by FedEx Corporation? This question seeks to explore the nuances of the funding target attainment percentage as reported in the annual funding notice, examining how this metric not only reflects the financial health of FedEx Corporation's pension plan but also how it affects employee confidence in future benefit payments and retirement planning.
Funding Target Attainment Percentage: The Funding Target Attainment Percentage for FedEx Corporation indicates the degree to which the pension plan is funded. A percentage of 101.33% for 2022 suggests that the plan has sufficient assets to cover its liabilities, providing security for employees' pension benefits. This high percentage likely increases employee confidence in the stability and reliability of their future pension payouts, essential for long-term retirement planning.
How does the merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan influence the benefits currently available to FedEx Corporation employees? This question aims to delve into the practical changes that may arise due to this merger, assessing whether it aligns with employee expectations regarding their pension benefits and how the transition process is managed by FedEx Corporation.
Merger of Pension Plans: The merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan appears to have been strategically managed to maintain benefit stability. Despite increasing liabilities by 5.3%, the merger was structured to ensure no negative impact on the benefit amounts payable to participants from either plan, preserving the expected pension benefits for all affected FedEx Corporation employees.
In terms of investment strategies, what measures does FedEx Corporation implement to ensure that its pension plan investments align with the long-term liabilities expected to be paid out to retirees? This question encourages an exploration of the investment policies in place, examining the asset allocations and risk management strategies that FedEx Corporation employs to ensure sustainable funding for its pension obligations, which could potentially include detailed analyses of stocks, debts, and alternative investments.
Investment Strategies: FedEx Corporation employs a diversified investment strategy across equities, fixed income, and alternative investments, aiming to meet long-term pension liabilities. This approach, which includes both active management strategies and the limited use of derivatives, is designed to generate returns that exceed market indices, thus ensuring adequate funding of pension obligations.
What options do employees of FedEx Corporation have for accessing their pension plan statements, and how frequently are these statements generated? The focus here is to understand the communication strategies employed by FedEx Corporation regarding pension benefit statements, including technological access points and the importance of these documents for employee financial planning.
Pension Plan Statements: FedEx Corporation provides annual pension plan statements through their Retirement Service Center, available electronically each fall. Employees can access their statements online or request them if notifications are not received, ensuring transparency and aiding in personal financial planning.
How are contributions to the FedEx Corporation Employees’ Pension Plan determined, and what role do excess contributions play in the plan's overall funding strategy? This question aims to educate employees about how the company balances mandatory contribution levels with potential excess contributions, exploring how these factors interact to influence the plan's solvency and employee benefits.
Contributions to the Pension Plan: Contributions to the FedEx Corporation Employees' Pension Plan are calculated to meet at least the minimum legal requirement and potentially include voluntary excess contributions. These excess contributions can help manage the plan's funding level and ensure its solvency, benefiting overall pension security for employees.
What types of benefits are guaranteed under the Pension Benefit Guaranty Corporation (PBGC) for FedEx Corporation employees, and what limitations exist that employees should be aware of? By focusing on the guaranteed benefits, this question prompts a discussion on the security of specific benefits provided by FedEx Corporation and highlights limitations, allowing employees to understand their rights fully.
PBGC Guarantee: The Pension Benefit Guaranty Corporation guarantees certain types of benefits for FedEx Corporation employees, such as pension benefits at normal retirement age and most early retirement benefits. However, there are limitations, such as exclusions for benefits without vested rights and recently increased benefits, which employees should be aware of to fully understand their pension security.
In what ways does the FedEx Corporation plan to adjust its pension funding strategy in light of changing federal laws that impact pension obligations? Employees are encouraged to consider how legislative changes influence corporate policies surrounding retirement benefits and the proactive strategies FedEx Corporation might take to remain compliant while ensuring the security of employee pensions.
Adjustments to Funding Strategy: FedEx Corporation is likely to adjust its pension funding strategy in response to legislative changes affecting pension obligations, such as those introduced by recent acts adjusting how pension liabilities are calculated. This proactive approach aims to ensure compliance with new laws while continuing to secure the financial health of the pension plan.
What are the steps that FedEx Corporation employees must take if they are considering retirement, particularly in how to navigate the pension plan and gain access to their benefits? This question aims to provide clarity on the retirement process, ensuring that employees are equipped with the necessary information regarding required documentation, timelines, and points of contact within FedEx Corporation.
Steps for Retirement Planning: Employees considering retirement should contact the FedEx Retirement Service Center to navigate their pension plan benefits. This process involves understanding necessary documentation, timelines, and available support, facilitating a smooth transition into retirement.
How does FedEx Corporation plan to manage potential funding shortfalls in the pension plan, and what mechanisms are in place for notifying plan participants should such an event occur? Employees would need to understand the proactive measures put in place by FedEx Corporation to address funding-related challenges while also knowing what this means for their benefits.
Managing Funding Shortfalls: In the event of potential funding shortfalls, FedEx Corporation has policies in place to manage such situations, including strategic contributions to mitigate shortfalls. The company maintains transparency with plan participants about funding levels and any significant changes affecting the pension plan.
For those seeking more information about their pensions and retirement options, how can FedEx Corporation employees contact relevant departments, and what resources are available for assistance? This question provides an opportunity for employees to familiarize themselves with contact points such as the FedEx Retirement Service Center, emphasizing the importance of open communication channels for addressing inquiries related to their pensions. Feel free to consult the provided document for more in-depth exploration of these topics.
Contacting for Pension Information: FedEx Corporation employees seeking more information about their pensions or retirement options can contact the FedEx Retirement Service Center. This center provides essential resources and support, ensuring employees have access to all necessary information regarding their retirement planning.
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