Shortfall Estimate For UAW Retiree Health Care Fund Increases By $16 Billion
The fund, which pays health care costs for more than 700,000 United Auto Workers retirees, has been adjusted because of changes in accounting assumptions and new projections of how long members will live.
Bloomberg:
Shortfall Rises By $16B At UAW Retiree Health Care Fund
The estimate of the unfunded future expenses of a trust that pays the health-care costs of more than 700,000 United Auto Workers retirees from three Detroit-area automakers widened by $16 billion last year as it changed accounting assumptions and adjusted for new projections of how long members will live. Prior to last year, the UAW Retiree Medical Benefits Trust had cut drug costs, added preventive care and restored benefits such as dental and vision while also increasing assets. Based on that success, the UAW had proposed a health-care pool for 295,000 active autoworkers in a new contract. The idea was downgraded to area of study after almost two thirds of the union’s members at Fiat Chrysler Automobiles NV rejected the labor deal with that provision. The vote came before the new financial results were released. (Green, 10/13)
Meanwhile, the Detroit Free-Press reports on how the "Cadillac" tax could impact auto workers' out-of-pocket costs.
The Detroit Free Press:
UAW Veterans Could Still Pay Their First Deductibles
Veteran workers at Fiat Chrysler could pay deductibles for the first time if the cost of their coverage triggers a politically sensitive tax that takes effect in 2018. In the "Explanation of Benefits" document in the proposed contract between the UAW and Fiat Chrysler is a letter from FCA health care executive Kathleen Neal to UAW Vice President Norwood Jewell. The two acknowledge in writing that the company and union discussed the "Cadillac tax" on high-cost health care plans that is a provision of the Affordable Care Act. (Gardner, 10/12)
