Salaried Chrysler Group Retirees To Seek Own Health Insurance Under New Program

Detroit-based Chrysler Group this month plans to begin notifying salaried retirees about whether they will receive a full flat-rate payment of $1,750 or less to purchase Medicare supplemental insurance under the companies' new salaried retirees benefits system, the Detroit Free Press reports. Chrysler in March announced that, beginning Jan. 1, 2007, the company no longer will pay the majority of costs for Medicare supplemental health insurance, dental, vision and prescription drug coverage. Salaried retirees will receive up to $1,750 per person in the first year to use toward purchasing coverage. Chrysler will continue to provide health insurance for workers and salaried retirees younger than age 65, who will pay a portion of the expense based on their incomes. The automaker said retirees who have a two-person contract will pay an average of $5,100 in premiums and out-of-pocket costs this year and an average of $4,300 in 2007 under the plan. Chrysler last week sent a newsletter to retirees detailing 15 health plans that offer benefits similar to those offered by the company, and meetings are being held nationwide to explain the program to retirees. The changes come amid rising health care expenses that threaten U.S. automakers trying to compete with foreign companies that do not pay for employee health insurance, the Free Press reports. Chrysler, whose health care costs have nearly doubled since 2000 to $2.3 billion this year, has said that its health care expenditures could nearly double again by 2013 to $4.5 billion unless changes are made (Merx, Detroit Free Press, 10/2).