Turner seeks Health Coverage Tax Credit program extension for Delphi retirees

U.S. Rep. Mike Turner (R-OH) on March 27 sponsored legislation to extend the health coverage tax credit for certain retirees. 

“The Delphi Salaried Retirees had their pensions unjustly slashed and now are at risk of losing their health care coverage,” said Rep. Turner, referring to former workers with the fledgling corporation known as Delphi Automotive, which in 2005 filed for bankruptcy following General Motors massive reorganization in 1999. 

In February 2009, the U.S. Bankruptcy Court determined that Delphi could terminate unvested retiree welfare benefits (medical, dental, vision and life insurance) without following the procedures set forth in Section 1114 of the Bankruptcy Code, according to the DRSA Benefit Trust, which manages the Delphi Salaried Retiree Association (DSRA) Voluntary Employees Beneficiary Association (VEBA).

Under the settlement, the debtors agreed that they would pay $8.75 million in overall subsidy payments to the Salaried Retirees’ Committee for the benefit of Delphi’s salaried retirees. At the same time, the Salaried Retiree 1114 Committee was authorized to form the DSRA VEBA Trust to offer a benefit eligible for the Health Coverage Tax Credit (HCTC), according to the DRSA Benefit Trust.

The HCTC benefit under Obamacare now pays 72.5 percent of the cost of health and prescription drug benefits for eligible retirees who are at least 55 but not yet 65 and who are receiving benefits from the Pension Benefit Guaranty Corporation (PBGC), according to the trust. 

PBGC in 2009 took over as trustee of the terminated defined benefit pension plan of the salaried retirees, triggering eligibility for the HCTC. And when Delphi also terminated the hourly rate employees defined benefit pension plan, the PBGC took over as trustee of that plan, too, again triggering eligibility for the HCTC, which is set to expire by year’s end. 

Rep. Turner sponsored the Health Coverage Tax Credit Reauthorization Act of 2019 to ensure Delphi salaried retirees and other eligible individuals have the option to continue their current health care beyond the Dec. 31 expiration date of the HCTC program, or whenever they decide to leave the program.

“This legislation would ensure that they continue to receive current coverage,” said the congressman, “so long as the participants are receiving Pension Benefit Guaranty Corporation (PBGC) pensions and there are no breaks in their coverage.”

Rep. Turner said he’s “proud to lead the fight for the Delphi salaried retirees and their families,” who for almost 10 years now have fought to retain such benefits.

“Nearly a decade ago in the aftermath of the financial crisis, the government picked winners and losers, leaving over 20,000 of these retirees with drastic reductions to their hard-earned pensions and benefits,” said Rep. Turner. “These men and women deserve the benefits they were promised, not years of stonewalling and delays as a result of a legal battle initiated by the Obama Administration.”

He added that it’s “important we continue to find solutions for these hardworking Ohioans who lost their pensions through no fault of their own.”