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Kokomo Auto Workers Rush To Use Up Benefits Before They Expire

This week, health benefits ran out for many retired auto workers in Kokomo. Worse, some members of Kokomo's Local 292 were given just one week of notice.

This week, health benefits ran out for many retired auto workers in Kokomo.  Worse, some members of Kokomo’s Local 292 were given just one week of notice that they’d have to make other arrangements.  Retirees have scrambled to reshuffle their budgets and make doctor’s appointments before their benefits expire.

The luckiest of Kokomo Local 292 members had three weeks to make dental and vision appointments and fill prescriptions.  The less fortunate heard about the changes for the first time at a meeting last week at Kokomo’s Memorial Gymnasium.  Several hundred members fanned themselves with informational hand-outs as they waited to learn of their losses. The first of these meetings was so full, many members could not even pull into the Local 292 parking lot.  Some — but not all — retirees received letters in the mail with details explaining their new benefits.

Director Mo Davidson said the Voluntary Employees Benefit Agreement, or VEBA, struck between the United Auto Workers union and GM in 2007, requires GM to contribute to the retiree trust fund until 2010.  GM still owes its part of the contribution, but in order to receive federal bailout funds, there has been government pressure for further union concessions.

As part of its concessions, the union has agreed to take $2.5 billion in cash and the rest in GM stock as payment for VEBA funds.  But that still leaves a deficit in money needed to continue benefits retired members and their families have enjoyed for years.  Davidson said if the company rebounds and stocks become more valuable, they can be sold and potentially used to bring back old benefits.

“I was kind of upset.  It seemed like it happened all of a sudden,” retiree Brenda Morgan said. “People didn’t really have enough time to rebound from the announcement.  Now everybody’s running to their eye care and their doctors to get their appointments before their insurance runs out.”

Carole Sitzes was fortunate to make an appointment in time.  “I always went where you can just walk in, but when I called them they were completely booked up through 6 July, which would have been past the date,” she said.  ”So I just looked around and I finally found an appointment and went and had my eye exam there.  My dental I had already went in February and they won’t pay for another one this year.”

The scheduling crunch forced some doctors in town to work overtime in an effort to fit everyone in.  Dr. Kathryn Jones said there’s been a unified effort at her office.  “We’ve been working our days off. We’ve been coming in on vacation. We’ve been doing all that we can,” she said.

Another consequence, Jones said, is that patients may opt for less expensive procedures.  For example, an uninsured client may have a tooth pulled rather than having a pricey root canal.  Jones says she doubts it will hurt her business, but Brenda Morgan said she’ll have to make fewer medical visits to compensate for a smaller budget.

“We were having our teeth checked twice a year,” Morgan said.  “We’re going to have to cut back on that-maybe once a year now.  But me being diabetic, I need to have these things checked.  We’re just going to have to come up with the money some kind of way.”

Morgan’s husband Dennis is a salaried retiree who lost his health benefits from GM several months ago.  Both of them are now seeking new jobs in a job market where nearly one in five people is unemployed. The alternative is retired life with no dental or vision health coverage and a limited prescription co-pay.

“We’re just going to have to hold our head up-to think how we spend our money and thank God for the benefits we still do have.  Just try to be more frugal about what we do in the future,” she said.

Unionized retirees are clinging to the small, remaining portions of union contributions on prescription drugs and emergency room visits, as well as coverage for dependent grandchildren where the grandparents are sole guardians.  Still, members are left to hope that more of their pensions and their remaining health coverage – however scant — won’t be lost as well.

  • J Crow

    It’s a shame that union workers who have fulfilled their end of a contract are now forced to pay for the consequences of their ‘partners” (read: management’s) irresponsibility.

    It is certainly true that the ‘culture’ has changed in the sense that many of the benefits that these workers enjoyed are not offered to today’s new employees. Nonetheless, that retirees are having their benefits taken away is no less than a criminal breach of contract.

  • Pingback: Kokomo Auto Workers Rush To Use Up Benefits Before They Expire | Emily Loftis

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