GM salaried staff get only consumer-driven health plans

DETROIT—General Motors Co. will offer only high-deductible consumer-driven health care plans to its 24,000 salaried employees, effective Jan. 1.

GM salaried employees will choose from two plans, both linked to health savings accounts. Under one plan, the deductible will be $1,300 for single coverage and $3,100 for family coverage, with a maximum annual out-of-pocket expense of $2,200 for those with single coverage and $5,000 for family coverage. Employees will pay monthly premiums ranging from $5 for those with single coverage and $15 for those with family coverage.

In the other CDHP, deductibles also will range from $1,300 to $3,100, but GM will cover all eligible in-network expenses after the deductibles are met. The monthly premiums for that plan will range from $25 for individual coverage to $75 for those with family coverage.

In addition, GM will contribute $1,300 to employees’ HSAs. That contribution is intended to help employees pay for uncovered health care expenses and to help them accumulate funds to pay for health care expenses after they retire, a GM spokeswoman said. GM salaried employees hired after 1993 are not eligible for retiree health care coverage.

In addition, in moving to a CDHP program, GM is trying to better control costs, while still offering a competitive health care benefits program, the GM spokeswoman said.

The move to high-deductible CDHPs is a big change for a company once known for its lavish health care benefits program.

But in the face of massive losses, culminating in a bankruptcy filing earlier this year, GM has cut back those programs. On Jan. 1, it eliminated health care coverage for salaried retirees eligible for Medicare, while in 2010 it is trimming health care coverage for salaried pre-Medicare eligible retirees. On July 1, it eliminated vision and dental care benefits for UAW-represented retirees.

The biggest benefit change came in a 2007 agreement with the United Auto Workers that ended GM’s commitment to provide retiree health care benefits to UAW-represented members, effective Jan. 1. In 2008, GM valued that liability at $50 billion.

Instead, GM is transferring $10 billion from an existing special trust, known as a voluntary employees’ beneficiary association, to a new UAW-controlled VEBA. GM also is contributing notes, preferred stock and other assets to the VEBA.

The exact value of GM’s VEBA contribution isn’t known. But under the 2007 agreement, which was revamped just prior to GM’s bankruptcy filing, experts estimated that GM unloaded the $50 billion retiree health care liability at a cost of about $30 billion.