Benefits March 15, 2006

Ford to Charge for Spousal Health Coverage

March 15, 2006 (PLANSPONSOR.com) - In its continued effort to reduce health care costs, Ford Motor Company has announced it will charge for health insurance and dental coverage for worker's spouses or same-sex domestic partners that are eligible for non-Ford health insurance.
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On June 1, workers will begin paying $110 a month for health insurance and $11 a month for dental benefits for their spouses or same-sex domestic partners who have access to other coverage, the Detroit News reports.

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According to the Detroit News, additional changes that will be implemented as of June 1 include:

  • Active salaried workers who opt for the Ford Medical Plan will continue to avoid monthly premiums, but their annual deductibles will increase by nearly 17%.
  • Workers who select an alternative health plan will see their monthly premiums go up 30 percent on average, while their annual deductibles will rise 33%.
  • Ford will cap health care spending for retirees and their surviving spouses at the average 2006 level. After that, any increases in insurance premiums will have to be paid entirely by the retirees or their survivors.

Ford spent $3.5 billion on health care expenses in 2005, compared with $3.1 billion the previous year, according to the Associated Press. The automaker has not projected how much it expects to spend on health care this year.

Recently a federal judge gave tentative approval to Ford’s retiree health-care concessions deal with the United Auto Workers (See Judge Approves Ford Retiree Health Pact ).

Compliance March 14, 2006

DoL Hits GA Firm with Suit over Plan Abandonment

March 14, 2006 (PLANSPONSOR.com) - Federal officials have filed a federal court lawsuit against the fiduciaries of a Jefferson, Georgia firm over allegations they extended improper loan payments from the firm's employee stock ownership plan (ESOP) to their parent company.
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A news release from the US Department of Labor (DoL) said more than $170,000 in loan payments were transmitted to Rehab Consultants of Florida (RCF) and the company officials then abandoned the plan altogether.

According to the lawsuit, plan committee members – Joseph Gentzel, Mary Ann Gentzel, Grayson Gentzel, Jennifer Heidt Gentzel, and Graeme Gentzel – violated the Employee Retirement Income Security Act (ERISA) by allowing the plan to engage in a prohibited transaction. The DoL charged that after the loan payments, the defendants dissolved RCI and stepped down from their posts without seeing that they were replaced.

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The value of the stock purchased by the ESOP declined from $19.74 per share in 1996 to $.79 per share in 1998 and is currently worthless.  

The suit seeks a court order requiring the defendants to restore to the plan all losses with interest.   The suit also asks the court to permanently bar the defendants from serving in a fiduciary capacity to any plan governed by ERISA and to appoint an independent fiduciary to manage, terminate and distribute plan assets to eligible participants.

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