Published on March 21, 2005 at 8:01 PM
The Chrysler Group will save itself tens of millions of dollars in health costs through changes it has won from the United Auto Workers union while costing employees and their family up to $1,000 in health care deductibles, according to a deal reported in the Detroit News, which it said is outlined in a March 10 letter to workers, but not publicly announced by either the union or the company.
An obscure labour contract provision first negotiated in 1982 but never invoked allows Chrysler to ask the union for relief if health costs spiral out of control, according to the paper. Chrysler is the North American unit of DaimlerChrysler AG.
It is now feared that General Motors and Ford Motors will also seek the same kind of cost savings from the UAW, which has previously fought any attempt to shift health care costs to its members. According to the report, annual deductions for employees and retirees using a network of preferred providers will be $100 for individuals and $200 for families. Those who go outside that network for medical care will face deductibles of $500 for individuals and $1,000 for families. Workers will also have co-payments up to $12.50 for vision care.
Deductibles, although common in most employers' health care plans, have not previously been a part of the plans offered to 35,000 hourly workers and retirees at Chrysler. The report says another 35,000 employees and retirees are covered by separate plans and are not affected by the changes in deductibles.