Tens of thousands of General Motors Corp. salaried workers and retirees are bracing for a new increase in their 2006 health insurance premiums, another chip in GM's vaunted employee benefits as its scrambles to cut costs.
Several retired GM salaried workers told The Detroit News Monday that the monthly premiums they pay for medical and dental benefits are set to increase by about 25 percent, information they gleaned from an internal Web site accessible to employees and retirees.
Word of the increases comes as the cash-strapped automaker prepares to enroll employees in health plans for next year beginning Oct. 19.
GM retiree Sy Seigel said he checked the benefits Web site Monday and discovered that his premiums will rise substantially in 2006.
If he keeps his current coverage plan, his 2006 medical premiums will increase to $63 a month from $52. His dental coverage will go to $8 a month from $5. Combined, the increase is about 27 percent.
"It's higher than I remember in the past," said Seigel of Rochester, New York. "But I'm not really complaining. Considering what other people pay, I'm pretty lucky."
GM spokeswoman Sharon Baldwin said the company is working to establish employee health care costs for 2006 but the company is not distributing that information to all salaried workers and retirees yet.
It appears that some workers and retirees were able to access information about their health care plans earlier than GM intended.
"It is possible that certain people may have had access to the preproduction areas (of the benefits Web site)," Baldwin said.
She said GM's open enrollment for salaried workers' health care plans begins Oct. 19.
"At that point it will definatly be live and accessible," Baldwin said.
GM, like most other U.S. corporations, has been asking workers to pay a bigger portion of their medical coverage tab in recent years to help offset the rapidly rising cost of health care.
The automaker's health coverage is still better than average.
GM's salaried workers pay 27 percent of their total health care costs on average while the company's UAW-covered hourly workers pay 7 percent, according to GM. The average U.S. corporate employee pays 32 percent of the cost of health care, GM said.
GM estimates its health care costs for about 1.1 million people will swell to $5.6 billion this year, up from $5.2 billion in 2004.
That makes GM the largest provider of health care coverage for employees in the world. Chairman and CEO Rick Wagoner has said the automaker's health costs are unsustainable.
GM is in talks with the United Auto Workers to lower expenses and has set a goal to cut its obligation to retirees by 25 percent.
The automaker's North American operations lost $2.5 billion in the first six months of the year.
GM retiree Jack Dickinson, who runs a Web site for GM retired workers called
www.overthehillcarpeople.com
, learned of the increase Monday. He said his rates are slated to increase by about 25 percent.
You can reach Sharon Terlep at (313)223-4686 or sterlep@detnews.com.
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