Sep 28, 2015
The bare bones health insurance coverage for Tier 2 workers at Fiat-Chrysler may become the new health insurance coverage for all.
According to a side letter in the tentative UAW-FCA agreement, the company will change coverage to avoid the 2018 federal “Cadillac” tax. Current insurance coverage for Tier 1 workers would likely be subject to the tax.
The Detroit Free Press (9/23/15) explains: “It is unlikely the tax or resulting deductibles would apply to Tier 2 workers hired after 2007. They already pay $300 deductibles for individual coverage and families pay a $600 deductible. In addition, Tier 2 individual plans carry a 10 percent co-insurance contribution up to $700 a year, with family plans incurring co-insurance of up to $1,400 a year.”
Just like lower tier wages were used as a wedge to bring down wages in the auto industry, the health insurance coverage for new hires is the model for new health insurance coverage for all.