The United Auto Workers Retiree Medical Benefits Trust was formed in 2007 as a result of a collective bargaining settlement between the UAW and three major auto makers: Chrysler Group, Ford Motor Company and General Motors. In the settlement, the retiree health care liabilities of the three companies was transferred to a new, independent Voluntary Employee Beneficiary Association, according to UAWTrust.org.
The UAW Retiree Medical Benefits Trust exists for the purpose of providing health insurance to its members, who are retired workers entitled to medical benefits according to the terms of their union contracts, according to its website.
Changes in the U.S. economy threatened the ability of the U.S. manufacturers to continue providing the medical benefits, explains UAW. At other companies, workers lost their coverage entirely because insurance coverage is not a protected right under law. The UAW proposed creation of a separate trust to help ensure that insurance coverage could be preserved. Although the 2009 financial crisis required cuts to the original benefit structure, the fund has succeeded in preserving retiree health insurance benefits, as of 2015.
Each auto company contributed to a separate tax-exempt fund that is administered by the Trust to provide insurance coverage, says the Trust. It became the largest non-governmental purchaser of retiree health care when it launched in 2010.