Ford To Replace Health Benefits With Stipends for Most Salaried Retirees
Ford Motor on Thursday announced plans to eliminate health benefits for salaried retirees who qualify for Medicare on Jan. 1, 2008, the Detroit News reports. In place of health benefits, Ford will provide salaried retirees who qualify for Medicare and eligible spouses and domestic partners with $1,800 annual stipends to pay for supplemental health care, dental and vision costs. Ford will place the stipends in health retirement accounts (Terlep, Detroit News, 11/2). Ford will no longer provide health benefits for dependents of salaried retirees who qualify for Medicare (Stoll et al., Wall Street Journal, 11/3). In addition, Ford on June 1, 2007, plans to increase health insurance premiums for most active salaried employees by about 30% and end their merit pay increases (DePass, Minneapolis Star Tribune, 11/2). Ford spokesperson Marcey Evans said, "The company wants to continue to be able to provide quality health benefits for employees and retirees and is just trying to find ways to balance the increased costs that we face each year" (AP/Evansville Courier & Press, 11/2). The moves likely will save Ford hundreds of millions of dollars. The company reported a $5.8 billion loss in the last quarter (Minneapolis Star Tribune, 11/2). Last year, Ford spent $3.5 billion on health benefits for 590,000 employees, retirees and dependents, and health care costs for the company have increased by 67% since 2000 (Detroit News, 11/2).
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