Meridian, UAW, lawsuit plaintiffs agree to modify retiree benefits for closed Centralia, Ill., facility

By Caroline Salls

Pittsburgh, May 24 - Meridian Automotive Systems Inc. requested court approval of a settlement agreement with the United Auto Workers and coverage litigation plaintiffs that modifies retiree benefits for retirees of the company's former operations in Centralia, Ill., according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The Centralia facility closed in 2003, and about 129 retirees continue to draw health and life insurance benefits under the facility's welfare benefits plan.

Under the agreement, retirees will continue to pay no premiums, have in-network deductibles of $50 per year for individuals and $100 for families and will continue to pay 10% co-insurance for most in-network coverage.

In addition, lifetime maximum coverage limits will be eliminated; annual maximums, deductibles and co-insurance for most preventative care will be eliminated; and coverage for emergency care will be modified to allow full coverage when a person reasonably believes emergency care is needed.

Current hearing, dental and life insurance benefits will continue unchanged.

In exchange, a new PPO will be established to modify reimbursement levels to be based on reasonable and customary approved amounts, to establish a new series of co-pays and to increase annual out-of-pocket expenses to $300 per individual, $600 per family from $200 per individual, $400 per family.

Prescription drug co-pays will now range from $4 to $12.

The agreement also settles the lawsuit in connection with discontinuation of the retiree health coverage.

By the union's calculations, Meridian will save $499,000 per year, while the company calculates that it will save $380,000 per year.

A hearing is scheduled for June 14.

Meridian, a Dearborn, Mich., supplier of lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers, filed for bankruptcy on April 26, 2005. Its Chapter 11 case number is 05-11168.

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