Economic Development Futures Journal

Saturday, March 25, 2006

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Latest on Chrsyler Healthcare Pass Along

The more you earn, the more you'll pay for health care at the Chrysler group beginning in 2007.

The new plan affects 13,800 salaried workers and 17,600 salaried retirees.

"Our health care costs have almost doubled since 2000," CEO Tom LaSorda said in an e-mail to employees announcing the change. "Health care is one of our largest fixed costs at $2.3 billion in 2006."

At the Chrysler group, health care costs add an average $1,400 to the cost of a vehicle, the company says. Chrysler also is negotiating with the UAW, seeking health care contributions from unionized workers and retirees.

Chrysler's move came the same week that Ford Motor Co. added fees for salaried workers' health care. Ford will charge employees for coverage of family members who are covered under another insurance plan, according to a report in The Detroit News.

Chrysler's active salaried workers now pay an average of $3,000 a year in co-pays, deductibles and premium contributions, Chrysler says.

Under the new plan, workers will shoulder more of the premium increases in 2007:

Up to 1,400 top executives could pay $1,500 more, on average.

Up to 9,400 management employees could pay $450 more, on average.

4,100 administrative staffers will not pay more.

Read more here.

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