Caterpillar Inc. has informed its retirees that they will be required to pay for their health-care benefits beginning September 1, reported Reuters. A fund set up by the United Auto Workers in 1998 — which until now had covered the cost of health-care premiums for Caterpillar employees who retired since January 1, 1992 — has run out of money.
Monthly premiums will total $134.44 for a single person not on Medicare and $280.88 for a family with two people on Medicare, the wire service added, citing a letter signed by Greg Folley, Caterpillar’s director of compensation and benefits. Those amounts are expected to rise between 28 percent and 38 percent as of January 1, according to the report.
Caterpillar also reportedly said in its letter that those premiums would be “dramatically” lowered by a proposed six-year contract, which was overwhelmingly rejected by UAW members at eight Caterpillar locals on April 25, reported the Associated Press. Union members have been working without a contract since that time; negotiations are slated to resume Monday, the AP added.
“Our hope is that employees will reconsider the proposal and ratify it in the near future — significantly lowering your costs,” Caterpillar said, according to Reuters.
The company also reportedly sent letters to retirees in December 2002 and September 2003 about health-care premiums.
According to Reuters, a union spokesman could not be immediately reached for comment.