Auto Workers’ Medical Benefits at Risk Under New Tax

via Wall Street Journal

GM, Ford and Fiat Chrysler will spend in excess of $2 billion in medical-cost coverage for hourly workers in 2015, or at least $14,800 per active worker, according to the auto makers.

Detroit’s negotiations this summer to reach a new four-year labor deal won’t just be an argument about wages. Generous health-care benefits for about 135,000 unionized factory workers are at risk of being cut to prepare for the Affordable Care Act’s “Cadillac” tax.

Health care has long been a fiercely protected benefit for United Auto Worker members, remaining generous even as the union has made other concessions. But the so-called Cadillac tax on companies with high-cost health plans is scheduled to take effect in 2018.

The law imposes a 40% excise tax on the annual cost of health care above $10,200 for individual coverage and $27,500 for family coverage. It is unclear how many UAW assembly workers have plans with costs exceeding those amounts, but industry officials say penalties could be significant…

To read the full WSJ article CLICK HERE

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Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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