Blue Cross and Blue Shield of Michigan has agreed to delay phasing out its retiree health plan for former bargaining unit employees until 2018, as part of an agreement with the UAW, Blue Cross officials confirmed Monday to Crain's Detroit Business.
"Based upon recent discussions with the UAW we have decided to delay the new retiree medical program for bargaining unit retirees until January 1, 2018," said Blue Cross in a statement.
In late June, Blue Cross announced plans to convert its retiree health plan to a defined contribution program for 3,200 participants who retired after Jan. 1, 1993, and another 4,138 expected future retirees. Excluded were union employees who would have continued under the old plan until their contracts expired.
But UAW President Dennis Williams blasted the Blues in an email to Crain's shortly after Crain's published a report June 24.
In the statement, Williams said: "In light of the attack Blue Cross Blue Shield has made on their retired employees, who have given a lifetime of loyal service and who are the most negatively impacted by additional financial burdens, it may be time to re-evaluate our longstanding relationship with Blue Cross Blue Shield of Michigan."
After talks with the UAW, Blue Cross said it plans to work with the union "to explore options to address rising medical costs. We have a long standing relationship with the UAW and are confident that we will come to a positive outcome."
The UAW declined to comment.
Blue Cross added that the delay does not affect nonbargaining unit retirees whose changes to retiree health care coverage begin on Jan. 1, 2017. In addition, about 516 retirees are not affected because they retired before 1993 and will remain in Blue Cross' group health insurance plan.
Blue Cross declined further comment.
Under the original Blue Cross proposal, retirees would have received a pre-funded health reimbursement account they would use to purchase individual health insurance with assistance of Towers Watson OneExchange private network.
The amount of funding depended on when the Blue Cross employee retired, length of service, age and job classification.
To receive the financial contribution from Blue Cross to the retiree's health reimbursement account, the retiree had to purchase a Blue Cross or Blue Care Network plan unless one is unavailable in the state they live.
Last year, Blue Cross reported it lost $68 million in net income on its overall business. The retiree benefit change was intended to be part of a larger effort to reduce administrative costs by $300 million over three years and increase revenue.
Blue Cross, Blue Care Network and related subsidiaries employ about 7,900 total workers.
Last week, Crain's interviewed a retiree who asked not to be identified. She said Blue Cross was offering her $208.33 per month, but the least expensive plan Blue Cross Medigap plan she could purchase cost about $400 per month without drug coverage.
"I worked for Blue Cross for 30 years and $208 won't cover hardly anything," she said.
