Members of the two largest unions representing General Electric Co. employees have ratified a new contract that improves health care benefits for employees but will eliminate coverage that supplements Medicare for future retirees, the company and the unions said.

Seventy-nine percent of the voting members of the International Union of Electrical, Salaried, Machine and Furniture Workers-Communications Workers of America and the United Electrical Radio and Machine Workers of America approved the deal, the unions said in a statement late last month.

The new contract’s terms will be extended to nine other unions that have local contracts with GE and will affect about 20,000 workers nationwide, according to a GE statement.

The contract includes added coverage for preventive care—such as routine checkups, vaccinations and screenings—and increases outpatient mental health visits from 30 to 45 per year. New coverage was also created for a halfway house to treat mental health and substance abuse. The medical lifetime maximum benefit was increased from $2.5 million to $3 million per worker.

The contract also boosts dental coverage, enlarging both the restorative and prosthodontic allowance (from $2,000 to $2,500 per two years) and the orthodontic lifetime maximum (from $2,000 to $2,500).

The new agreement, though, raises employee premium contributions for health insurance. The proportion paid by workers, now between 18 percent and 19 percent, will rise to 20.5 percent for individual and family coverage, according to a union spokeswoman.

Additionally, GE will no longer provide health insurance for retirees eligible for Medicare. This change will apply to employees hired after December 31, according to the contract.

The employee co-payment for a brand-name prescription drug obtained through a retail pharmacy will be increased to $22 from $16 and to $50 for brand-name prescriptions obtained through mail order. The annual prescription drug out-of-pocket maximum increases by 12.5 percent, to $2,250 for individual coverage and $4,500 for family coverage, according to the contract.

Eligible retirees and surviving spouses stand to receive a larger pension based on their year of retirement and length of employment. The biggest increases will be given to those who have been retired the longest and will take effect in December, according to the contract.

Additionally, employees will contribute 3 percent of pay—after the first $70,000 of compensation—toward their pension benefits. This change will begin in 2008. Under the expired agreement, contributions were applied on compensation above $60,000.

The new contract is retroactive to June 18 of this year and will remain in effect until June 19, 2011.

Filed by Beth Murtagh of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.