First, they are recognized as our sisters and brothers. They are in communion with the Catholic Church - although not full communion with us. We should note that while someone like Martin Luther would be labeled as a heretic for spreading heresy, he is only so because he personally rejected articles of faith that he knew to be true and mislead people with false teachings. Those who are born Lutheran (or become Lutheran out of a clean conscience) today are not considered Heretics, because they are not rejecting the Church, they are instead trying to do the best they can.
We should note that organizations may be heretical or schismatic, without the individuals in them being heretics. For instance, a common example is the Eastern Orthodox Church, which is, as an institution, schismatic.
We can also recall that we receive the graces of Christ through his sacraments. To receive the fullness of that grace, we would obviously want to receive all seven sacraments. That is not a "plan of salvation" of sorts, just the way that Christ has pointed us to receive as much as possible from him - to be in the "fullness of Christ". Thus, we see that even the schismatic Orthodox Church has all seven sacraments and they are all valid. And even Protestants have two valid sacraments - baptism and marriage. Thus, they are able to receive the graces of Christ through these sacraments (we could also get into a very deep and lengthy discussion of forgiveness of sins, but it would be a different topic for a different post).
We pray that our separated brethren will come into the fullness of Christ and the fullness of his Body - in communion with the Holy Church. But, we do not restrict salvation (for that matter, we do not restrict salvation only to those who are "Christians" in the typically though sense, but realize that God's grace may have ways of reaching people who may never even be exposed to Christ). At the same time that we realize they are not in full communion with us, we should grow in love and faith with them, because we are all trying to get to the same places and we should be able to help each other immensely.