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US:Ford limits spouse health care

Ford limits spouse health care

It adds surcharge if family members have coverage, too

Sharon Terlep and Josee Valcourt / The Detroit News

Ford benefits
Starting June 1, Ford Motor Co. will make changes to its health care plans for white-collar workers, including:
Surcharges for health insurance and dental coverage for workers whose spouses or same-sex domestic partners want Ford coverage but are eligible for non-Ford health insurance.
Active salaried workers who opt for the Ford Medical Plan will continue to avoid monthly premiums, but their annual deductibles will increase by nearly 17 percent.
Workers who select an alternative health plan will see their monthly premiums go up 30 percent on average, while their annual deductibles will rise 33 percent.
Ford will cap health care spending for retirees and their surviving spouses at the average 2006 level. After that, any increases in insurance premiums will have to be paid entirely by the retirees or their survivors.

Ford Motor Co. this week is rolling out a series of cutbacks to health care benefits for its salaried work force, including an unconventional move to charge extra to cover spouses who have access to other health care insurance.

At the same time, DaimlerChrysler AG's Chrysler Group is expected to detail changes to its health care coverage today for salaried workers and retirees.

On June 1, Ford will begin charging workers $110 a month for health insurance and $11 a month for dental benefits for spouses or same-sex domestic partners who want Ford coverage but are eligible for non-Ford health insurance.

The move comes as more companies are trying to limit the number of people on their health care rolls, though relatively few major corporations charge extra for spouses because they have access to other coverage.

"Salaried employees seem to have picked that change as the flashpoint this year," said one Ford employee who attended a meeting Monday where the changes were detailed. "They're not happy about it."

About half the questions from employees revolved around the spousal surcharge, he said.

At Ford, the spousal surcharge is one of many changes being implemented as the company works to cut a health care tab that last year topped $3.5 billion.

The company distributed informational packets to employees in December and is meeting with them this week to explain the changes. Employees can begin enrolling in benefits plans March 28.

Ford has about 40,000 salaried workers in North America, including those in Canada and Mexico. It pays health benefits for some 550,000 white-collar workers, blue-collar workers, retirees, spouses and dependents.

"There's an additional cost to Ford to have additional spouses on the policy," Ford spokeswoman Marcey Evans said of the surcharge for spouses. "If the spouse can get other coverage, our employee needs to help share some of those additional costs."

Few companies have opted to charge extra for a spouse who could get coverage elsewhere, though the practice is becoming more common. In 2005, about 15 percent of employers with 20,000 or more workers had special provisions on benefits coverage for spouses who have other coverage available, up from 12 percent in 2004, according to Mercer Human Resource Consulting.

Major companies to tack on such surcharges include Verizon Wireless, Clorox and the Gannett Co., the former owner of The Detroit News and current Detroit Free Press parent company.

Procter & Gamble and Wal-Mart have imposed the fees for years. Northwest Airlines imposes no surcharge, but instead bans spouses from its health rolls if they're eligible for coverage elsewhere. Neither General Motors Corp. nor DaimlerChrysler impose a spousal surcharge.

"That's clever," said Rashid Bashshur, a University of Michigan professor of health management and policy. "Lots of companies are looking for ways to save money. That's definitely one way to discourage double coverage."

In addition to the surcharge for spouses, Ford will increase annual deductibles by about 17 percent for employees who opt for the Ford Medical Plan.

With that plan, deductibles are higher but workers will avoid monthly premiums and, for the first time, have access to a pre-tax health savings plan that can help them manage medical costs.

Workers who select an alternative health plan will see their monthly premiums go up 30 percent on average, while their annual deductibles will rise 33 percent. Many employees also will face a higher cap on out-of-pocket expenses, depending on the health plan they choose.

The company also is dropping preferred provider organization UniCare as an option for employees. Evans said the decision was based on the cost of the plan and how many workers used it.

"We are just constantly trying to balance the ability to offer a high-value plan to employees while keeping a handle on costs," she said. "It's quite a balancing act."

The health care changes at Chrysler are expected to be announced at a news conference this afternoon.

Last month, Chrysler CEO Tom LaSorda said the automaker would decide in 30-45 days whether to reduce health care spending for its roughly 14,600 salaried workers.

Though Chrysler has outperformed crosstown rivals Ford and GM, the company expects cost pressures this year from increased expenses and energy costs.

The Auburn Hills-based company's health care spending grew 12 percent to $2.2 billion from $1.96 billion in 2004. Chrysler expects to dole out 14 percent more this year or $2.6 billion.

Vaughn Oswalt, a retired Chrysler salaried worker who lives in Howell, is confident Chrysler retirees will be able to handle any changes that might be coming. "The pressure is on the American companies but I'm confident that things will work out," he said.

GM and Ford plan to cap contributions for salaried retiree health care at 2006 levels beginning Jan. 1, 2007. The moves will cost retirees more as health care costs grow over the years.

Chrysler would not comment on any changes its making.

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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