NCRO and Chrysler exchange emails to answer 2010 pre-65 healthcare contribution questions
From: NCRO Member1
To: NCRO President
I am a pre-65 retiree and learned last week that the company will no longer make any contribution for my healthcare beginning in 2010. This seems to conflict with the information in this communication. Is there someone I can contact for further clarification?
From: NCRO Member2
To: NCRO Director
This is regarding the elimination of healthcare credits that reduce healthcare premiums.... not contributions as listed. Is this true? Did Chrysler eliminate healthcare credits for retirees and only offer them to active employees? Did we miss something? Or is NCRO Member1 mistaken? Can we find out from Chrysler? I will be out of pocket so can you check on this and call me?
From: NCRO President
To: Kathy Neal (Chrysler), Mike Palese (Chrysler)
Could you please advise us if the retiree health care credits are being eliminated for retirees? The retiree involved spoke to both Benefits Express and Karen Rowlands, but was not able to get clarification. See the information below. Thank you.
From: NCRO President
To: NCRO Member1
Chrysler no longer uses a credit system for pre-65 benefits. They base the retiree’s charges on a percentage of their pension amount. Kathy Neal, Chrysler HR, responded to our inquiry as follows: "In May 2009 as Chrysler emerged from bankruptcy, we announced that we would continue to provide health care programs to salaried retirees and that medical plan premiums for pre-65 enrollees would increase, particularly for those with a greater ability to pay. We also announced that we were changing the way retiree medical premiums would be calculated; that the calculation would be in alignment with the methodology used to determine premiums for our active employees (percent of income); and that beginning in August 2009, retiree medical plan premiums would be based on a percent of the retiree’s gross pension income reflective of the health care plan election and the number of individuals covered. Medical premiums for 2010 (pricetags) continue to reflect the new calculation methodology (adjusted for inflation) in that gross pension income, including any Hartford annuity, is multiplied by the applicable 2010 plan election and coverage percentage rate. Additionally, Chrysler continues to assume the balance of the plan’s cost after the appropriate premium and plan design cost share has been applied. "
From: NCRO Member1
To: NCRO President
Thanks for following up with HR. The thing that doesn't square with Kathy's explanation is this is the same methodology used for current salaried employees. I am not aware of any current employee in the 96/97 band range that has experienced a 300% increase? This is because they threw in the annuity which relates to a series of bonuses from the past vs. base salary for current employees. I guess they have the legal right to do whatever they want? Sincere thanks for your assistance
From: NCRO Advisor
To: NCRO President
This is accurate with respect to medical but the personal report I received still shows credits being provided for dental coverage. However understand that dental is a small percentage of the overall healthcare premium pre age 65 retirees face. Dental expenses are usually less than $50 per month so again it is not a major cost factor. You might also advise people that those individuals turning age 65 next year will not have an option to select any of the HSA PPO plans and will be required to participate in the BCBS PPO plan. My understanding is that IRS regulations prohibit the HSA option for anyone turning age 65 in the up coming year. Those currently in HSA plans will see their premiums increase by over $100 per month in 2010 depending upon the HSA plan option in which they are currently enrolled. For those who have little or no medical utilization this will represent a pretty substantial cost increase.
