Chapter

Can VEBAs Alleviate Retiree Health‐Care Problems?

Aaron Bernstein

in Reorienting Retirement Risk Management

Published in print August 2010 | ISBN: 9780199592609
Published online September 2010 | e-ISBN: 9780191594618 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199592609.003.0013
Can VEBAs Alleviate Retiree Health‐Care Problems?

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Recent negotiations between the United Auto Workers (UAW) and Detroit automakers focused attention on an innovative response to the long‐term US decline in retiree health insurance. The union agreed to set up a trust called a voluntary employees' beneficiary association (VEBA) to assume responsibility for the UAW retiree medical care at the companies. An analysis of the General Motors Corporation VEBA suggests that it is a second‐best option to employer‐paid retiree coverage. However, absent comprehensive national health‐care reform, it may be a viable alternative for those unable to fend off the elimination of retiree health care provided by employers.

Keywords: retiree health insurance; union plan; automaker; employer‐provided plan; trust

Chapter.  10304 words.  Illustrated.

Subjects: Pensions

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