Memorandum of Understanding - General Motors Corp. and UAW
| (a) Annual GM pension benefit income of $8,000 or less (excluding the lump-sum payment), and | |
| (b) Monthly benefit rate of $33.33 or less. |
| Monthly Contributions (Current and Future Retired Participants and Surviving Spouses only) | |
| $50 (single); $105 (multiple party) | |
| Initially reduced to $10 (single); $21 (multiple party) by DC VEBA. | |
| Traditional Care Network (TCN) and Preferred Provider Organization (PPO) Deductibles (Current and Future Retired Participants and Surviving Spouses only) | |
| $300/$600 | |
| Initially reduced to $150 (single); $300 (multiple party) by DC VEBA. |
| TCN and PPO Co-insurance (Current and Future Retired Participants and Surviving Spouses only) | |
| 10% In Network | |
| 30% Out of Network | |
| TCN and PPO Out of Pocket Maximum (Current and Future Retired Participants and Surviving Spouses only) | |
| $500/$1000 In Network (including deductibles, excluding monthly contributions, prescription co-payments, Durable Medical Equipment (DME)/ Prosthetics & Orthotics (P&O), Mental Health/ Substance Abuse (MHSA), dental and vision cost sharing and other Amended Plan sanctions or exclusions, such as MHSA care beyond limits or outside of network) | |
| Initially reduced to $250 (single); $500 (multiple party) by DC VEBA. | |
| $1000/$2000 Out of Network (including deductibles, excluding monthly contributions, prescription co-payments, DME/ P&O, MHSA, dental and vision cost sharing and other Amended Plan sanctions or exclusions, such as MHSA care beyond limits or outside of network) | |
| Initially reduced to $500 (single); $1000 (multiple party) by DC VEBA. | |
| Emergency Room (Current and Future Retired Participants and Surviving Spouses only) | |
| $50 co-payment per visit unless admitted. The co-payments do not apply to meeting Amended Plan deductible amounts and do not apply to meeting Amended Plan out-of-pocket maximum amounts. The co-payments apply regardless of whether the Amended Plan out of pocket maximum has been met. | |
| Prescription Drugs (Active, Current and Future Retired Participants and Surviving Spouses) | |
| The co-payments do not apply to meeting Amended Plan deductible amounts and do not apply to meeting Amended Plan out-of-pocket maximum amounts. The co-payments apply regardless of whether the Amended Plan out of pocket maximum has been met. | |
| $5 generic/$10 brand retail co-payment | |
| $10 generic/$15 brand mail order co-payment per 90 day supply | |
| $15 retail co-payment for ED Drugs | |
| $18 mail order co-payment for ED Drugs | |
| Plan Design Escalation | |
| All dollar-denominated plan design items such as drug co-payments, TCN and PPO deductibles, out-of-pocket maximums, and contributions will increase annually at a rate not to exceed 3% as specified in Attachment B. | |
| Dental Plan (Current and Future Retired Participants and Surviving Spouses only including those covered by Affordability provision) | |
| Coverage will be provided for retirees, surviving spouses and dependents from the DC VEBA. The assets of the DC VEBA will be used to provide the benefit and will initially pay 100% of claims and administrative costs that would have been paid by the dental plan. | |
| Health Care Program Modifications (Active, Current and Future Retired Participants, Surviving Spouses, and Dependents, unless otherwise specified in Attachment C) | |
| See Attachment C. |
| Mitigation | |
| The reductions for monthly contributions, deductibles, and out-of-pocket maximums, as well as the percentage of retiree dental to be provided by the assets of the DC VEBA are initially planned to be as set forth above. Any subsequent change will be determined by the Committee as limited by the trust agreement. | |
| Administration | |
| The administration of the Amended Plan shall be as defined in the Plan as well as the supplements, letters and memoranda attached thereto. This includes the joint committee identified in Exhibit C. Section 4. (d) and the miscellaneous letter for the Corporation-Union Committee on Health Care Benefits. |
| (a) GM will cause the transfer of $1.0 billion of assets from a trust or otherwise to the DC VEBA (the "First Contribution"). Such transfer will be made as soon as practicable after the entry of Judgment approving this agreement and in no event later than the date on which retirees are required to make a monthly contribution under this agreement. One year following the First Contribution GM will cause the transfer of $1.0 billion of assets from a trust or otherwise to the DC VEBA (the "Second Contribution"). In 2011, on the anniversary date of the First Contribution GM will cause the transfer of $1.0 billion of assets from a trust or otherwise to the DC VEBA (the "Third Contribution"). If after the Second Contribution and prior to 2011 the value of the assets in the DC VEBA drops below $600 million as of the last day of any month, the Third Contribution will be pulled forward and paid within 15 days thereafter. In the event the Judgment approving this agreement is reversed or materially altered in whole or in part, there will be no obligation to make any transfer under this paragraph. | |
| (b) Profit Sharing Payments as defined below. | |
| (c) Wage Deferral Payments as defined below. | |
| (d) Stock Appreciation Rights as defined below. | |
| (e) Stock Dividend Payments as defined below. |
| Effective with the first quarterly COLA adjustment following entry of Judgment approving this agreement, a cumulative total of seventeen cents ($0.17) will be diverted from future quarterly COLA increases, in additional increments of no more than six cents ($.06) in any quarter. Effective with the COLA adjustment immediately following the three month period in which the full seventeen cent ($0.17 cent) diversion has been reached, that amount shall be subtracted from the Cost of Living Allowance table, and the table shall be adjusted so that the actual three-month Average Consumer Price Index equates to the allowance then payable. | |
| In addition, the September 18, 2006 three percent (3%) general increase to the hourly wage rate will not be payable. Instead an equivalent amount, equating to an average of $0.83 (eighty-three cents) per hour, will be contributed to the DC VEBA. |
| 1. If the declaratory judgment action is enjoined or stayed, or withdrawn, dismissed, or otherwise terminated prior to judgment, or if the Judgment is denied in whole or in material part, either GM or the UAW may terminate this agreement by 30 days written notice to the other party. | |
| 2. If the Judgment is granted by the District Court, but overturned in whole or in part on appeal or otherwise, either GM or the UAW may terminate this agreement by 30 days written notice to the other party. |
| International Union, UAW | General Motors Corporation | |
| Eligibility: All Hourly retirees are eligible to enroll in this catastrophic plan, except for active employees and retired and surviving spouse enrollees with annual GM pension benefit income of $8,000 or less and a monthly benefit rate of $33.33 or less. | |
| Initial and Ongoing Enrollment: Eligible Participants electing not to make monthly contributions for program coverage or who fail to authorize monthly contributions from their pension payments will be defaulted into this "catastrophic plan" option. As well, eligible Participants may voluntarily elect to enroll in this plan. Eligible Participants who are enrolled in this catastrophic TCN Plan will be subject to Rolling Enrollment rules. | |
| Plan Design: |
| Monthly Contribution: $0 | |
| Deductible: $1,250 (single) and $2,500 (family) | |
| Co-insurance: after deductible is met, 10% in-network and 30% out of network |
| Out-of-Pocket Maximums: | $2,500 (single) and $5,000 (family) in-network; $5,000 (single) and $10,000 (family) out-of-network |
| ER Co-Payment: $100 per visit, waived if admitted | |
| Rx Co-payment Retail: $15 Generic, $35 Brand; $50 (Erectile Dysfunction medications) | |
| Rx Co-Payment Mail Order: $30 Generic, $70 Brand; $100 (Erectile Dysfunction medications) |
| Deductibles, co-insurance, and out-of-pocket maximums noted above are not subject to mitigation. All dollar-denominated plan design items such as drug co-payments, deductibles and out-of-pocket maximums will increase annually at a rate not to exceed 3% as specified in Attachment B. |
|
Escalation
|
3.0 | % | 3.0 | % | 3.0 | % | 3.0 | % | 3.0 | % | 3.0 | % |
| $ (Where Applicable) | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | ||||||||||||||||||
|
Monthly Contributions
|
||||||||||||||||||||||||
|
Single
|
50 | 52 | 53 | 55 | 56 | 58 | ||||||||||||||||||
|
Family
|
105 | 108 | 111 | 115 | 118 | 122 | ||||||||||||||||||
|
Medical Plan A
|
||||||||||||||||||||||||
|
Deductible — Single
|
300 | 309 | 318 | 328 | 338 | 348 | ||||||||||||||||||
|
Deductible — Family
|
600 | 618 | 637 | 656 | 675 | 696 | ||||||||||||||||||
|
Co-insurance In Network
|
10.0 | % | 10.0 | % | 10.0 | % | 10.0 | % | 10.0 | % | 10.0 | % | ||||||||||||
|
Co-insurance Out Network
|
30.0 | % | 30.0 | % | 30.0 | % | 30.0 | % | 30.0 | % | 30.0 | % | ||||||||||||
|
MOOP Single (In Network)
|
500 | 515 | 530 | 546 | 563 | 580 | ||||||||||||||||||
|
MOOP Family (In Network)
|
1,000 | 1,030 | 1,061 | 1,093 | 1,126 | 1,159 | ||||||||||||||||||
|
MOOP Single (Out Network)
|
1,000 | 1,030 | 1,061 | 1,093 | 1,126 | 1,159 | ||||||||||||||||||
|
MOOP Family (Out Network)
|
2,000 | 2,060 | 2,122 | 2,185 | 2,251 | 2,319 | ||||||||||||||||||
|
E/ R Co-payment**
|
50 | 52 | 53 | 55 | 56 | 58 | ||||||||||||||||||
|
Rx Plan
|
||||||||||||||||||||||||
|
Generic — Retail
|
5 | 5 | 5 | 5 | 6 | 6 | ||||||||||||||||||
|
Brand — Retail
|
10 | 10 | 11 | 11 | 11 | 12 | ||||||||||||||||||
|
Select Drugs — Retail*
|
15 | 15 | 16 | 16 | 17 | 17 | ||||||||||||||||||
|
Generic — Mail
|
10 | 10 | 11 | 11 | 11 | 12 | ||||||||||||||||||
|
Brand — Mail
|
15 | 15 | 16 | 16 | 17 | 17 | ||||||||||||||||||
|
Select Drugs — Mail*
|
18 | 19 | 19 | 20 | 20 | 21 | ||||||||||||||||||
| * | ED Drugs |
| ** | Not subject to deductible or out-of-pocket maximum |
| • | Coverage to Medicare B Benefit (regardless of Med B enrollment) and Medicare Part B Maximum Payment Provisions: |
| • | For Medicare eligible enrollees (regardless of whether or not they are enrolled in Medicare Part B), Program benefits will be limited to an amount equal to the secondary balance payment that would have been made on the basis that, on the date of services, the enrollee was enrolled in Medicare Part B and received services from a provider that participates in Medicare. In the event an enrollee receives services from a provider that does not accept assignment, the enrollee will be responsible for all fees charged above the Medicare allowed amount, unless the enrollee is in a situation in which the enrollee does not have the ability or control to select a provider that accepts Medicare assignment to perform the service. No enrollee payment over the Medicare allowed amount will count towards enrollee cost sharing maximums. | |
| • | It is recognized that the above provisions will indirectly require Medicare eligible enrollees who delayed enrollment in Medicare B, to enroll upon the implementation date of this agreement. The parties agree to send educational pieces 90-120 days prior to implementation, to those enrollees identified as eligible for Medicare, but not yet enrolled. Such delayed enrollment into Medicare Part B will result in penalties being applied by Medicare to the Part B monthly premiums. GM has agreed to work with Medicare to identify a way to eliminate penalties incurred. This may involve GM making a lump sum payment to Medicare; however, these discussions are not complete at this time. In the event GM and Medicare cannot reach agreement on eliminating the penalty, GM will establish a single nationwide Traditional Care Network (TCN) plan in which Medicare eligible enrollees who have elected to delay enrollment in Medicare Part B will be enrolled and this plan will not be subject to the provisions outlined in the first bullet above. Any enrollee in this group who later decides to enroll in Medicare Part B will be placed in a regular TCN plan and will be fully responsible for any and all penalties incurred at that time. |
| • | Coordination of Benefits for Medications covered under Medicare Part B: |
| • | The parties agree to encourage Medicare Part B enrollees to assign Medicare benefits to those pharmacies from which the enrollee receives medications that are covered under Medicare Part B. A program will be developed and implemented to educate enrollees about Medicare paying for certain medications and to encourage enrollees to use those pharmacies that have the capabilities to electronically bill Medicare and to assign Medicare benefits to such pharmacies in order for the Program to take advantage of Medicare paying primary on the claim. Further, the parties agree to monitor the improvement of electronic Medicare billing capabilities across the pharmacy network. Upon mutual agreement, the parties may at a later date implement a mandatory program. At that point, enrollees who utilize pharmacies which do not have electronic claim submission capabilities with Medicare will be required to pay for the secondary balance of the claim at the point of sale and seek reimbursement via submission of a paper claim from the prescription drug carrier. | |
| • | The provisions outlined above will not apply to Active enrollees eligible for Medicare as their primary coverage. | |
| • | This entire Program Coordination related to Medicare Eligible Enrollees will be implemented as soon as practicable after approval of the agreement by the Federal District Court. |
| • | This entire Program Modification related to Modifying "Cosmetic" Provisions will be implemented as soon as practicable after approval of the agreement by the Federal District Court. |
| • | Require prospective authorization of out-of-network referrals. | |
| • | In the event a referral is not approved prior to a service being provided, the enrollee is responsible for the out-of-network co-insurance. Any amount charged over R&C does not count toward enrollee cost sharing maximums. | |
| • | The parties agree not to promote further reductions in PPO networks as outlined in the Miscellaneous Letter (Preferred Provider Organization), but to support ongoing network improvements by the carriers as quality and performance evaluation tools continue to develop and are utilized to drive members to high performing providers, as mutually agreed upon. | |
| • | This entire Program Modification related to Improving the Referral Process for the "Preferred Provider Organization" Option will be implemented as soon as practicable after approval of the agreement by the Federal District Court. |
| • | The current Health Care Program language allows the parties to initiate and implement these Program Modifications related to the Integrated Care Management Program. These modifications will be implemented as soon as practicable following the ratification of this agreement. |
| • | This entire Program Modification Related to Modifying Hold Harmless will be implemented as soon as practicable after approval of the agreement by the Federal District Court. |
| • | Select Drugs/Drug Classes |
| • | Proton Pump Inhibitors (PPIs): Restrict coverage to generic omeprazole only. Brand dispensing will be permitted only for the following: |
| • | Barrett's esophagitis and Zoellinger-Ellison syndrome patients (prior authorization required). | |
| • | Patients demonstrating intolerance to omeprazole or who have failed prior prescription drug omeprazole therapy. |
| • | Selective Serotonin Reuptake Inhibitors (SSRIs): Restrict coverage to generic citalopram for patients who have not previously used either citalopram or escitalopram (Lexapro). For patients who have previously used citalopram prescriptions and then present a prescription for escitalopram, prior authorization is appropriate. | |
| • | Statins: Preferred coverage review for Pravachol and Crestor. |
| • | Specific Rx Tools Edits: |
| • | Dose Duration for PPIs | |
| • | Dose Optimization for Statins | |
| • | Step Therapy for Enbrel | |
| • | Step Therapy for Rheumatoid Arthritis medications | |
| • | Prior Authorization for Erythroid Stimulants | |
| • | Prior Authorization for Alzheimer's disease medications | |
| • | Prior Authorization for Anti-Emetics |
| • | Step Therapy Edits — These edits ensure treatment is closer to evidence-based or commonly accepted guidelines by having patients use acceptable first line therapies initially for treatment. For example, use of first line treatments could be required prior to dispensing COX II Inhibitors used to manage pain. | |
| • | Prior Authorization Edits — These edits are designed to confirm diagnosis and other clinical information before medications are dispensed. They also act as a safeguard to ensure FDA-approved uses (or common medically acceptable uses) of certain medications. For example, injectable drugs used to treat hepatitis and growth hormones, are examples of medications covered by these edits. | |
| • | Dose and Quantity Edits — These edits promote medication dosing or length of therapy consistent with FDA recommended or commonly acceptable medical practice. These edits also could limit quantity per prescription fill to FDA recommended or common dosing guidelines. Examples of dose and quantity edits include: |
| • | Length of Therapy: limiting treatment of finger/toe nail fungus to 3 months as approved in FDA labeling |
| • | Dose Duration: limiting availability of high dose medication to the period medical guidelines recommend | |
| • | Appropriate Quantity: allowing 8 estrogen patches per retail script and 24 per mail order script (dosing is twice a week) |
| • | Dose Optimization Edits — These edits promote once a day dosing versus multiple dosing per day for drugs where no clinical reason exists to divide dosing. | |
| • | "34 day" and "90 day" Provisions — These edits are designed to identify quantities that appear to be in excess of the amount considered usual for a 34 or 90 day supply which then requires a conversation between the dispensing pharmacy and physician prior to the quantity being dispensed. |
| • | The current Health Care Program language allows the parties to initiate and implement these Program Modifications, items 1-7. These modifications will be implemented as soon as practicable following the ratification of this agreement. |
| • | Monthly Contributions: $50 single; $105 multiple party (Current and Future Retired Participants and Surviving Spouses only, excludes those covered by the Affordability provision). Initially reduced to $10 (single); $21 (multiple party) by DC VEBA. |
|
| • | Office Visit co-payments: $10 | |
| • | ER co-payments: $50 (Current and Future Retired Participants and Surviving Spouses only, excludes those covered by the Affordability provision) | |
| • | Prescription Drug co-payments: (Current and Future Retired Participants and Surviving Spouses only, excluding those covered by the Affordability provision) |
| • | Retail: $5 generic/$10 brand; $15 Erectile Dysfunction medications | |
| • | Mail Order (if offered): $10 generic/$15 brand; $18 Erectile Dysfunction medications | |
| • | It is recognized that some HMOs may not be able to or may be unwilling to administer the Rx design outlined above. In the event this should occur, the parties will jointly agree upon an Rx design that achieves comparable savings. Additionally, it is agreed that if an HMO has implemented a mandatory mail order feature, the mail order co-payments will not exceed those outlined above. |
| • | HMOs may implement all pharmacy management tools currently available within their books of business. |
| • | Each HMO will make available to the membership a listing of pharmacy management tools employed by the plan. | |
| • | If an enrollee, as a result of dissatisfaction with the pharmacy tools used by the HMO, wants to enroll in a different plan offering, the enrollee will be permitted to do so at any time. |
| • | This entire Program Modification related to Modifying HMO Benefit Design and Administration will be implemented as soon as practicable after approval of the agreement by the Federal District Court. |
| Drug Brand Name | Drug Generic Name | Therapeutic Class | ||
|
ACCURETIC
|
quinapril/hydrochlorothiazide | Hypertension | ||
|
ACEON
|
perindopril | Hypertension | ||
|
ACTIVELLA
|
estradiol/norethindrone | Estrogen Replacement | ||
|
ACTONEL
|
risedronate | Osteoporosis | ||
|
ACTOS
|
pioglitazone | Diabetes | ||
|
ADVICOR
|
lovastatin/niacin | High Cholesterol | ||
|
AGGRENOX
|
dipyridamole/aspirin | Antiplatelet Agent — Stroke prevention | ||
|
ALTOPREV
|
lovastatin xl | High Cholesterol | ||
|
ATACAND
|
candesartan | Hypertension | ||
|
ATACAND HCT
|
candesartan/hydrochlorothiazide | Hypertension | ||
|
AVALIDE
|
irbesartan/hydrochlorothiazide | Hypertension | ||
|
AVANDAMET
|
rosiglitazone/metformin | Diabetes | ||
|
AVANDIA
|
rosiglitazone | Diabetes | ||
|
AVAPRO
|
irbesartan | Hypertension | ||
|
BENICAR
|
olmesartan | Hypertension | ||
|
BENICAR HCT
|
olmesartan/hydrochlorothiazide | Hypertension | ||
|
CADUET
|
amlodipine/atorvastatin | Hypertension — Cholesterol | ||
|
CLIMARA PRO
|
estradiol/levonorgestrel | Estrogen Replacement | ||
|
COMBIPATCH
|
estradiol/norethindrone | Estrogen Replacement | ||
|
COMTAN
|
entacopone | Parkinson's Disease | ||
|
COREG
|
carvedilol | Hypertension — CHF | ||
|
DIOVAN HCT
|
valsartan/hydrochlorothiazide | Hypertension | ||
|
EVISTA
|
raloxifene | Osteoporosis | ||
|
FEMHRT
|
ethinyl estradiol/norethindrone | Estrogen Replacement | ||
|
FOSAMAX
|
alendronate | Osteoporosis | ||
|
GLUCOVANCE
|
glyburide/metformin | Diabetes | ||
|
GLYSET
|
miglitol | Diabetes | ||
|
HYZAAR
|
losartan/hydrochlorothiazide | Hypertension | ||
|
LEXXEL
|
enalapril/felodipine | Hypertension | ||
|
LOTREL
|
amlodipine/benazepril | Hypertension | ||
|
MIACALCIN
|
calcitonin | Osteoporosis | ||
|
MICARDIS
|
telmisartan | Hypertension | ||
|
MICARDIS HCT
|
telmisartan/hydrochlorothiazide | Hypertension | ||
|
MIRAPEX
|
pramipexole | Parkinson's Disease | ||
|
MOBIC
|
meloxicam | Pain Management — NSAID | ||
|
ORTHO-PREFEST
|
estradiol/norgestimate | Estrogen Replacement | ||
|
PLAVIX
|
clopidogrel | Antiplatelet Agent — Stroke prevention | ||
|
PLETAL
|
cilostazol | Platelet Aggregation Inhibitor | ||
|
PRANDIN
|
repaglinide | Diabetes | ||
|
PRAVIGARD PAC
|
pravastatin/aspirin | Cholesterol — Stroke Prevention | ||
|
PRECOSE
|
acarbose | Diabetes | ||
|
REQUIP
|
ropinarole | Parkinson's Disease | ||
|
STARLIX
|
nateglinide | Diabetes | ||
|
TARKA
|
trandolapril/verapamil | Hypertension | ||
|
TEVETEN
|
eprosartan | Hypertension | ||
|
TEVETEN HCT
|
eprosartan/hydrochlorothiazide | Hypertension | ||
|
TRICOR
|
fenofibrate | Cholesterol — Triglycerides | ||
|
ZETIA
|
ezetimibe | High Cholesterol | ||
|
ZIAC
|
bisoprolol/hydrochlorothiazide | Hypertension | ||
|
ZYFLO
|
zileuton | Asthma |
| ’06-’11 Avg. | |||||
| Annual Net Sav. | |||||
|
($B)
|
|||||
|
Hourly Expense(1)
|
|||||
|
Service Cost
|
0.1 | ||||
|
Interest
|
0.8 | ||||
|
Amortization of Loss(3)
|
(0.2 | ) | |||
|
Prior Service Cost Amortization(2)
|
2.2 | ||||
|
Total Gross Expense
|
2.9 | ||||
|
Expected Return On Assets
|
— | ||||
|
Net Expense
|
2.9 | ||||
|
Cash
|
1.0 | ||||
| (1) | Value to be used for "setting" projected GM before tax profit impact |
| (2) | Prior Service Cost Amortization Period = Average Remaining Service Life 7.1 Years |
| (3) | Loss Amortization Period = Average Remaining Working Life 8.62 Years |
| a. A standardized reporting system for adverse drug reactions; | |
| b. Independent comparative evaluation of new drugs against existing drugs and broad-based distribution of the findings; | |
| c. An end to the manipulation of patent expirations and extensions; | |
| d. FDA approval for generic biopharmaceuticals. |