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Old 03-24-2004, 03:26   #1 (permalink)
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U.S.:Ford, DaimlerChrysler workers must repay benefits

70,000 ineligible dependents received health insurance coverage, costing millions of dollars

By Sheri Hall / The Detroit News

Big burden
Ford
Ford provides health insurance to 560,000 workers, dependents and retirees nationwide.
Last year Ford spent $3.2 billion on health benefits.
Since 2000, Ford has identified 50,000 people who were ineligible but still receiving company health benefits.
Ford's long-term health care liability totals $32 billion.

DCX
DaimlerChrysler AG spent $1.4 billion on health benefits in 2002.
Since 2001, DaimlerChrysler had identified 20,000 relatives of employees who were ineligible but still receiving company health benefits.
DaimlerChrysler's long-term health care liability totals $13.7 billion.

DEARBORN — Two Detroit automakers say that about 70,000 relatives of employees have improperly collected health care benefits — estimated at tens of millions of dollars — and the companies are demanding the money back from workers.

Ford Motor Co. and DaimlerChrysler AG, facing soaring health care expenses, launched health benefit audits to identify relatives who are ineligible for benefits, such as ex-spouses and children who no longer qualify under their parents’ health plans.

Both companies offered amnesty periods when hourly and salaried workers could remove ineligible dependents with no penalty, then began to charge affected workers — in some cases with payroll deductions of up to $100 weekly — to recover the ineligible benefits, including insurance premiums and medical bills.

Such reviews can save large corporations tens of millions of dollars, said Jim Bevins, director of health care services at Budco Corp. — the Highland Park-based health care con******t that conducts this type of audit.

The audits come as Detroit’s automakers struggle to pare escalating health care costs. General Motors Corp., Ford and DaimlerChrysler spent more than $9 billion last year on health care benefits covering more than 2 million workers, dependents and retirees. The companies spend about $1,400 per vehicle on health care.

Ford and DaimlerChrysler declined to disclose the total amount being collected and the number of employees involved, but a Ford spokesman said the audit is saving the company millions of dollars in unnecessary health care expenses.

Ford began auditing employee health care coverage in 2000 and has found 50,000 ineligible dependents to date. DaimlerChrysler AG began an audit in 2001 and has discovered 20,000 ineligible recipients.

Typically, large companies provide health insurance to employees’ children as long as they remain in college and are 23 or younger.

The Detroit News learned of the audits when a Metro Detroit Ford hourly employee, who did not want to be named, complained about weekly deductions from his paycheck.

According to letters between Ford and the employee, the worker didn’t know that his children — who were no longer eligible for benefits because they turned 19 — were still covered under Ford’s health insurance plan. He said he responded to Ford’s amnesty letter, but at the time still didn’t realize his ineligible children were covered.

According to the documents obtained by The News, the employee said he learned of the mistake two years after both children had gotten jobs and health coverage of their own. Neither child made a claim on the Ford policies after they became ineligible, he said.

The worker appealed his case to Ford benefit managers, but the company rejected his appeal. He estimates the errors will end up costing him $10,000, which will take two years to pay off.

While some employees complain about the benefit audit, others such as Herb Hibbs, vice president of UAW Local 862 in Louisville, Ky., said Ford acted fairly in handling the audit. His three children still qualify for Ford health care coverage.

“They passed out a letter and told you when to call to get everything situated,” he said. “Everybody in the whole Ford system had to send in something.”

The audits provide an important opportunity for companies to trim health care costs, which have been steadily rising over the past five years, said Bevins of health benefit auditor Budco. He estimates Budco will conduct five to six benefit audits for Fortune 500 companies this year.

“Controlling health care costs by eliminating ineligible dependents allows many companies to continue to provide benefits to those who do qualify,” he said.
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