More than a half-million General Motors and Chrysler retirees will again get dental and vision insurance coverage in January, thanks to a dramatic improvement in the finances of the UAW Retiree Medical Trust.
In a letter posted on its website, the trust said it was restoring benefits that members had before the 2009 bankruptcy filings of General Motors and Chrysler. The benefits of retirees from Ford Motor Co., which did not declare bankruptcy, were not interrupted.
The trust provides health care to retired autoworkers and relatives at GM, Chrysler and Ford.
“We recognize the importance of quality dental and vision coverage in maintaining your overall health,” said the letter from outgoing UAW President Bob King and Robert H. Naftaly, who chairs the committee that oversees the trust.
“That’s why the governing board of the trust has authorized the trust staff to provide dental and vision coverage for 2015. This coverage, pending negotiations with insurance carriers, will be comparable to the dental and vision coverage for UAW retired workers prior to the 2009 bankruptcy process.”
As part of the bankruptcy restructuring at Chrysler and GM in 2009, the health care trust eliminated hourly retiree dental and vision coverage and some prescription drugs for hourly retirees. Low-income retirees who previously had no co-pay were required to make an $11 monthly co-payment. Today, Chrysler and GM workers with the lowest pensions pay $16 a month; Ford employees with the lowest pensions have no co-pays.
In an interview, King said the trust — which was once 60 to 70 percent funded — is now fully funded.
“It shows that we made sacrifices when necessary,” King said. The trust, he added, was an example of “creative problem solving” with employers to help but ensure workers are protected.
The cost savings, he said, come from greatly improved administration of the retirees’ health care, including tough bargaining with insurance carriers and a boost in the value of the stock held by the trust.
The trust has focused on cutting administrative costs, managing carriers and improving quality of care.
It also worked to ensure better coverage for basic and preventive services, and offering services to retirees with chronic conditions, such as diabetes, to better manage their health.
The trust previously restored to GM and Chrysler retirees a limited preventive dental insurance benefit and allowed retirees to get a routine vision exam every two years with a $25 co-pay.
Ford retirees have dental insurance with benefits of up to $1,700 a year.
It was not immediately clear what the additional Chrysler and GM retiree benefits will be worth.
In the letter, King and Naftaly praised the retirees for “switching to generic drugs, using preventive services and maintaining healthy behaviors.”
“Many of you have also used trust programs, such as diabetes education, Medicare Advantage options and routine office visit coverage to help even more. All of these programs help avoid the cost of unnecessary care and provide you with better health outcomes.”
Said Naftaly: “This agreement is in the best interests of the trust’s UAW Chrysler retiree members and their families who rely on the trust to provide vital health care benefits.”
The trust was created in 2007 to allow the automakers to off-load long-term health care obligations in exchange for cash up front.
As part of contract talks in 2007, GM agreed to fund $47 billion in retiree health care costs with $35 billion in cash to create a Voluntary Employee Beneficiary Association, or VEBA, that assumed responsibility for hourly retiree health care almost five years ago. The UAW trust received stock in GM in exchange for some of the cash it was owed. Ford and Chrysler created similar trusts.