GM Replacing Traditional Health Plan for Some Retirees

By Staff Report

Oct. 22, 2009

General Motors Co. will replace its traditional health care plan for salaried retirees younger than 65 with a consumer-driven health plan linked to health savings accounts effective January 1, 2010.

Under the new arrangement, posted on a GM retiree Web site, the annual deductible will be $2,500 for individual coverage and $5,000 for family coverage. The maximum annual out-of-pocket expense will be $3,500 for individuals and $7,000 for families.

A GM spokesman was not available for comment.

After deductibles are met, GM will pay 80 percent of the cost of medical services and prescription drugs delivered through in-network providers and 60 percent of out-of-network costs.

However, certain preventive services that include annual physicals, mammograms and prostate and colon cancer screenings will not be subject to the deductible.

In addition, certain preventive generic prescriptions, such as cholesterol-lowering medications, will be subject to smaller co-payments—$10 for a prescription from a retail pharmacy and $20 if filled through mail-order pharmacies.

In 2010, salaried retirees with individual coverage will be allowed to contribute up to $3,050 to health savings accounts, while retirees with family coverage will be allowed to contribute $6,150 to an HSA. Also, retirees age 55 and older will be allowed to contribute an additional $1,000 a year to their HSA in so-called catch-up contributions.

Retirees will be allowed to establish an HSA at a financial institution of their choosing. However, GM will pay administrative fees of HSAs that are set up with Bank of America Corp.

Monthly premiums for the retiree consumer-driven health plan will range from $150 for individuals to $253 for families.

GM will allocate $260 a month to retirees’ health reimbursement arrangements but will halt those allocations when salaried retirees turn 65. GM, which earlier this year filed for and then emerged from Chapter 11 bankruptcy reorganization, eliminated health care coverage for Medicare-eligible salaried retirees at the start of this year.

In addition, as part of a 2007 contract with the United Auto Workers, GM will stop providing retiree health care coverage to UAW members effective January 1, 2010. Instead, it will contribute billions of dollars in cash and other assets to a special trust controlled by the UAW.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail
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