What to Do If GM Cut Your Health Insurance

General Motors' (GM Quote) salaried retirees were caught by surprise last week with the announcement of the withdrawal of health care from 2009, and the initial anger is still there, but now it's being replaced by concerns about the future.

Here's an outline of what GM retirees can expect, and what steps to take to get health insurance if this has happened to you.

What Has Changed

Effective Jan. 1, eligible GM salaried retirees and their spouses will no longer receive health care benefits once they reach 65 and become eligible for Medicare. Instead they will receive a taxable increase to their pension of $300 per month. Eligible retirees are those who currently do or would have received GM health care assistance after age 65.

Both retiree and spouse will continue to receive GM health care until they individually reach 65.

The $300 increase to the pension is a discretionary increase and is subject to GM's continuation of this benefit, which means that it could be reduced, removed or increased in the future.

GM has contracted with Extend Health to provide health insurance advice and coordinate enrollment, and has asked individual health insurers not to contact retirees directly.

GM Plan Isn't So Bad, Comparatively

Both Ford (F Quote) and Chrysler have been through this process over the past two years, and GM retirees may actually consider themselves somewhat fortunate after looking at the options offered by the other companies.

Chuck White, chairman of a group of Ford retiree organizations, says, "We get $1,800 each year into a Health Reimbursement Account, plus the same for a spouse/domestic partner. The average retiree would prefer the GM plan, no medical expenses to be reimbursed, spend it however you want. It is twice as much, even if it is taxable."