Chrysler Group, UAW Union Reach Health Care Deal

March 22, 2005 (PLANSPONSOR.com) - Chrysler Group has reached an agreement with the United Auto Workers union that will see employees paying deductibles for previously free health care.

The move, intended to save the division of DaimlerChrysler money in an environment of rising health costs, will see about 35,000 hourly workers, retirees and families starting to pay between $100 and $1,000 in deductibles on health care, according to the Detroit News. Employee co-payments on vision care will also be instituted, with $12.50 being paid for each visit.

The deductibles will be charged to employees and retirees covered by the company’s preferred provider organization (PPO). Annual deductibles will be $100 for a single person and $200 for families. For those outside the PPO, deductibles are $500 for an individual and $1,000 for a family. All deductibles apply to office visits, physicals, and all eligible hospital, surgical and medical benefits, according to the Detroit News. However, they do not apply to prescription drugs and special services such as mental health coverage.

All changes will go into effect April 1. The talks to limit health care costs began six months ago between the company and the union.

Automakers have been hit harder than usual as of late by health cost increases. The Big Three – Ford, DaimlerChrysler, and General Motors – paid over $10 billion in health expenses for 2004 alone (See E&Y Outlines Problems, Solutions to Auto Industry Health Woes ).

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