As Many Americans Face Rising Health Care Costs, Freight Rail Employees Will See Their Premiums Decrease by More Than 10% in 2025
Effective Jan. 1, 2025, unionized freight rail employees’ monthly health care premiums will decrease by more than 10%, from $309.21 to $277.54, for those covered by the Railroad Employees National Health and Welfare Plan or SMART-TD Health and Welfare Plan — a monthly cost savings of $31.67. This meaningful reduction in health insurance costs reflects the industry’s commitment to delivering affordable, high-quality health care to freight rail employees and their families, which is possible thanks to better than anticipated claims experience and collaborative efforts between rail carriers and labor unions to manage costs.
Effective joint management has helped plan managers identify and pursue opportunities that reduce employee costs without sacrificing the high-quality service these plans provide. Some of the factors contributing to lower premiums in 2025 include lower medical claims experience than anticipated in 2023 and 2024, administrative improvements with respect to prescription drug management, the introduction of no-cost orthopedic surgeries with top surgeons in-network through Lantern, and growing utilization of virtual health care services like Teladoc for non-emergency and mental health care.
At a time when the average American family’s health premiums continue to climb, rail workers experienced no premium increases in 2024, and now they will pay even less in 2025 while maintaining access to best-in-class health care.
A recent Kaiser Family Foundation study noted a 7% increase in the average employer-sponsored family health insurance premium over the past year, pushing the average annual premium for family coverage to $25,500. With their premium contributions capped at 15% — compared to the national average of 25% — rail employees enjoy more money in their pockets and enhanced access to the care they need.
This positive news for 2025 does not change the fact that medical and pharmacy costs continue to rise nationally. Effective, collaborative joint management of the freight railroad industry’s health insurance plans will remain necessary now and in the future to limit potential premium increases.
