USA: Union outlines GM healthcare deal details
The United Autoworkers union has outlined details of a tentative new healthcare agreement with General Motors at a press conference in Detroit.
According to the Associated Press (AP), GM retirees represented by the United Auto Workers who pay nothing now for their health care coverage would have to come up with up to $US752 annually in deductibles, co-payments and monthly premiums.
GM hourly workers would contribute $1 per hour in future pay increases to a new fund to help pay for retirees' health coverage. Single retirees would pay up to $370 in deductibles and fees for their coverage. And most retirees and all active hourly workers would pay higher co-payments for their prescription drugs.
The Associated Press said GM pays for health care for 750,000 US hourly employees, retirees and their dependents but the agreement would exclude around 74,000 low-income retirees whose GM pension is $8,000 a year - most of those are elderly or are the surviving spouses of GM retirees, according to the UAW.
The Associated Press noted that UAW workers must ratify the agreement for it to take effect though union president Ron Gettelfinger declined to say when the vote would take place, noting the UAW and GM still need to work out some details.
If it is ratified, AP added, GM says the agreement would save it $3 billion annually before taxes and would cut $15 billion off its $60 billion in retiree health care liabilities.
Gettelfinger reportedly said the union agreed to the changes after reviewing GM's financial situation and was convinced the automaker needed the help it was requesting.
"This is a major move on our part, and it's very difficult and very challenging," Gettelfinger told the news agency after meeting with local union leaders from across the country. "These are the times in which we find ourselves. We're not hiding from our responsibilities."
According to the Associated Press, Gettelfinger said free-trade agreements that don't protect US workers and bankruptcy laws that allow companies to shed their pension obligations are partly to blame for the current climate, and repeated his call for a national health care system.
The Associated Press said that, while the agreement would be a big change for the UAW's retirees and hourly workers, who have long enjoyed some of the best benefits in the world, the premiums still pale in comparison to the US average, according to a recent study by the Kaiser Family Foundation.
The study reportedly said a single worker contributes $610 and families contribute $2,713 annually in premiums for coverage in the average US employer-sponsored health care plan while, by comparison, single UAW retirees would pay premiums of $120 and families would pay $252 annually under the agreement.
The actual cost of the premiums is higher, but GM and UAW hourly workers would pick up the rest of the tab through the new fund called the Voluntary Employee Benefit Association, AP noted.
The report added that GM would donate $3 billion to the VEBA over the next six years and it would also be funded through contributions in the future wages of active hourly workers. In exchange, hourly workers would continue to pay no premiums or deductibles for their own care.
Retirees also would pay up to $500 annually per family in deductibles and co-payments under the plan, as well as $50 for emergency room visits, AP said.
Hourly workers and most retirees would have to pay $5 more than they do now for a 90-day supply of mail-order prescriptions. They also would have to pay new, higher co-payments of up to $18 for medications such as Viagra.
The Associated Press noted that Ford and Chrysler Group plan to ask the UAW for similar benefits, but Gettelfinger wouldn't comment on negotiations with other automakers.