Ohio white-collar retirees from Delphi Corp. could be getting some help with their health care costs after a tentative agreement was reached between the bankrupt company and a committee representing those retirees. The settlement must be approved by Delphi’s creditors and the bankruptcy court.
The company will contribute $8.75 million into a separate fund that will be established to subsidize medical costs for salaried retirees.
The fund also covers the cost of creating a Voluntary Employees’ Benefit Association (VERA), a system that covers health care insurance costs with tax-free funds. A national health care program will be selected to manage the fund.
Delphi estimates that it will cost the typical retiree between $300 and $660 per month to maintain coverage, while family coverage could cost as much as $1,800 per month. Dental coverage would cost between $45 and $125 extra, depending on whether individual or family coverage is requested.
Earlier this year, a U.S. Bankruptcy judge allowed Delphi to abruptly terminate health care and life insurance benefits for its current and future salaried employees.
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