American Airlines has sent letters to its retirees, saying it will be ending its Retiree Standard Medical Plan option for non-union employees.

The health insurance plan will be canceled as of Dec. 31, 2009. Instead, retirees will be able to purchase a supplemental Medicare coverage plan. But under the new programs, retirees will have to pay monthly premiums.

According to the letter, retirees had already pre-paid contributions to their retiree medical plan while they were employed by American Airlines. Those who have an outstanding prefunded balance will receive a refund, plus or minus any gains or loss of investments as of Dec. 31, 2009. Spouses who have been previously covered by the retiree medical plan will also lose coverage.

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