GM to cap health care contributions for retirees

General Motors Corp. will cap its contributionto salaried retirees’ health care costs at 2006 levels, leaving them tobear the mounting costs of future increases.

The decision affects100,000 salaried retirees and 26,000 active employees hired before1993, as well as their spouses and eligible dependents.

Employees hired after Jan. 1, 1993, are not eligible for retiree health care benefits and are not affected by the changes.

Theautomaker said Tuesday the move will reduce its future health careliabilities by $4.8 billion and save $900 million in administrativeexpenses annually. It also expects the cap to result in cash savings ofabout $200 million within five years and then to increase after that.

Northville resident Robert Stasiak retired from General Motors in 1989 believing he’d have free health care for life.

Butby the mid-1990s he started paying co-pays and premiums. This year, hewas startled when his health insurance premium more than doubled to $75per month from $35 per month and his office visit and prescription drugco-pays rose to $30 from $20.

But under this cap announcedTuesday, he and other GM retirees will see their annual health costsincrease in much larger increments — potentially thousands of dollars– beginning in 2007 when they will begin to carry all increases inhealth care costs.

Read the rest of this story in the Detroit Free Press.