Union for Grocery Store Clerks Explains How Contract Might Affect Health Care
United Food and Commercial Workers officials at a press conference on Wednesday contested supermarket chains' portrayal of an ongoing strike as a "tussle over just $5 to $15 a week" in newspaper advertisements and letters to workers, the Los Angeles Times reports. According to Sidney Abrams, a consultant to the union and chair of the CalPERS' health benefits committee, workers would have to contribute an average of $95 a week for health care to maintain their current level of coverage if they were to accept a contract proposal drafted by Safeway's Vons, Albertson's and Kroger (Cleeland, Los Angeles Times, 10/23). About 70,000 UFCW members at more than 850 grocery stores in Southern California on Oct. 11 went on strike after contract negotiations between the workers and officials from the grocery store chains failed, largely because of disputes over health benefits. Because of the sluggish economy, rising health care costs and increased competition from nonunion competitors, the grocery store chains have asked employees to pay $5 a week for individual health care coverage and $10 to $15 a week for family coverage. In addition, the grocery stores have proposed that employees pay as much as $75 for prescription drug coverage and that their dental and vision care benefits be terminated. The union opposes changes to their health plans and wants a 50-cent-an-hour raise the first year of the contract and 45-cent raises in each of the following two years (California Healthline, 10/20).
The union contends that under the grocery chains' proposal, employees would end up either paying higher premium costs or having their benefits reduced because the health plan formula would be changed from one in which the chains agree to maintain certain benefits, regardless of price, to a fixed-contribution plan in which the chains cap the amount they agree to pay to the fund. The contract proposal states that the grocery store companies would increase their contribution to health care costs from $3.85 per hour worked by each employee to $4.04 for workers employed at the time the contract is signed. The employers' contributions for those employees would increase to $5.38 per hour by the third year of the contract. However, contributions for new employees would be capped at $1.35 per hour. Union officials say that the companies' proposal would cause health benefits to decline for current employees because young, new hires, who usually keep costs down in health plans, would be part of a separate health plan and would not be subsidizing current older workers' greater consumption of health services and prescription drugs (Los Angeles Times, 10/23). For new employees, the employer health care contributions would amount to about $150 to $200 per month; the national average amount employers pay for health care is $519 per employee per month, according to consulting firm Hewitt Associates (Galvin, Orange County Register, 10/23). Union officials say that the chains would have to "replenish" a six-month reserve fund for benefits, which the union previously had allowed the companies to use for other expenses, to make the transition to a fixed-contribution plan, according to union spokesperson Jill Cashen, the San Diego Union-Tribune reports. The money to replenish the fund would cost approximately 85 cents per hour per employee and would be deducted from the employers' proposed hourly contributions to the fund, Cashen said (Berestein, San Diego Union-Tribune, 10/23).
In a written statement, the grocery store chains said they are "confident that with modest changes in the plan ... we will continue to deliver some of the best health care coverage in the nation to our current employees," adding that the union is spreading "worst-case scenario speculation" (Sullivan, Ventura County Star, 10/23). They also stressed that "more than 90% of Americans today already pay part of their health care premium" and said that their contributions for current employees' coverage would increase by about 40% over three years (San Diego Union-Tribune, 10/23). However, a supermarket official who asked to remain anonymous said, "We have never said that what we have on the table now will guarantee the existing plan of benefits for the term of the agreement." Abrams said the changes in coverage that have been proposed are "just insane," adding, "This offer would destroy the health care plan in a short number of years" (Los Angeles Times, 10/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.