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Report: Chrysler wins health savings
UAW agrees to deductibles for 35,000 employees, retirees, saving Chrysler tens of millions: report.
March 21, 2005: 7:47 AM EST

NEW YORK (CNN/Money) - Chrysler Group has won changes from the United Auto Workers union that will save it tens of millions of dollars in health costs, while costing employees and their family up to $1,000 in health care deductibles, according to a published report.

The Detroit News reported the deal, which it said is outlined in a March 10 letter to workers, but not publicly announced by either the union or the company. A little known labor contract provision first negotiated in 1982 but never invoked allows Chrysler to ask the union for relief if health costs spiral out of control, according to the paper. Chrysler is the North American unit of DaimlerChrysler AG (Research).

The report says that General Motors Corp. (Research) and Ford Motor Co. (Research) are likely to seek the same kind of cost savings from the UAW, which in the past has fought any attempt to shift health care costs to its members.

The annual deductibles for employees and retirees using a network of preferred providers will be $100 for individuals and $200 for families. Those who go outside that network for medical care will face deductibles of $500 for individuals and $1,000 for families. Workers will also have co-payments up to $12.50 for vision care, according to the report.

While deductibles are common in most employers' health care plans, they have not been a part of the plans offered to 35,000 hourly workers and retirees at Chrysler. Another 35,000 employees and retirees are covered by separate plans and are not affected by the changes in deductibles, according to the paper's report.

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