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California | THE SUPERMARKET STRIKE

Clash Focuses on Co-Pays, Premiums -- and Risk

October 23, 2003|Nancy Cleeland | Times Staff Writer

In newspaper ads and letters to workers, the major supermarket chains are portraying the strike in Southern California as a tussle over just $5 to $15 a week.

That's the range, the chains say, that workers would have to pay for quality health insurance under the employer-proposed contract.

The United Food and Commercial Workers contends that the weekly sums the chains are talking about would buy a bargain-basement plan at best. To maintain the health benefits the old pact guaranteed would cost workers an average of $95 by the third year of the new contract, according to the union's chief benefits consultant, Sidney Abrams, who also heads the health benefits committee of the California Public Employees' Retirement System.

That, largely, is what the strike is all about: What constitutes a fair and properly funded health insurance plan and how much of the bill should employees foot?

The two sides answer the questions very differently.

For example, the three chains have proposed a bare-bones plan for people hired under the new contract. The chains say those benefits would be on a par with what other retailers offer their workers. Abrams says the result would be a "pathetic sham of a health plan" that many would simply opt not to buy.

FOR THE RECORD
Los Angeles Times Saturday December 06, 2003 Home Edition Main News Part A Page 2 National Desk 1 inches; 41 words Type of Material: Correction
Supermarket strike -- In its coverage of the supermarket strike and lockout that began Oct. 11, The Times has said repeatedly that the labor dispute affected 859 union grocery stores in Southern and Central California. In fact, 852 stores are affected.

The union made its case at a news conference Wednesday, where labor leaders said the grocery chains were misrepresenting the facts. The chains responded with a statement saying the union was painting a "worst-case scenario."

"We are confident that with modest changes in the plan, including a small employee contribution to health-care premiums, we will continue to deliver some of the best health-care coverage in the nation to our current employees," said the statement from Kroger Co.'s Ralphs, Albertsons Inc. and Vons, a unit of Safeway Inc.

In an interview, a top supermarket official who asked not to be identified conceded that company contributions -- combined with the suggested employee payments of $5 for individual coverage or $15 for family coverage -- would not buy the top-flight insurance that union members have enjoyed and for which they have paid no premiums.

"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," the official said.

The strike that started Oct. 11 has put picket lines in front of 859 Vons, Pavilions, Ralphs and Albertsons stores, from the Mexican border to Mono County.

The employers' contract offer, rejected by 97% of union voters, outlines contributions that would be made by the supermarkets and the workers but does not specify what kind of plan those contributions would fund.

It commits the employers to paying into a trust fund for current workers -- $4.04 per hour worked by every employee the first year, growing to $5.38 an hour in the third year of the pact.

For people hired under the new contract, the contribution to the fund would be capped at $1.35 an hour.

A board of trustees, equally divided between union and supermarket representatives, would design the coverage plans.

In past contracts, the union and employers negotiated a detailed health plan, and employers agreed to pay whatever was needed to fund it. UFCW supermarket employees in the region have never paid premiums for full family health insurance.

The chains say they cannot afford to do that anymore because of rising health-care premiums and increased competition from nonunion competitors such as Wal-Mart Stores Inc.

For its part, the union has agreed that workers should shoulder a portion of the higher health-care costs. Union officials say they offered to have workers pay deductibles, for example, and to increase co-payments for doctor visits.

Benefits experts say that by capping the amount employers will pay into the fund, the companies will shift the burden for rising health-care costs to their workers. Each year, adjustments would have to be made in the amount workers contribute or in the benefits they get.

"Basically, they're saying, 'We're going to pay X amount and you bear all the risk,' " said Glen Melnick, an expert on health-care finance at the Rand think tank in Santa Monica. "If I were advising the union, I'd say, 'Wait a minute.' "

Based on the union's estimate of the total hours worked by all employees -- most of whom put in fewer than 40 hours a week -- the stores would contribute nearly $6,000 per worker in the first year of the contract. Several experts said that probably would fall within the national average for employer-provided health care.

"It's really hard to make these comparisons, but it's higher than the average I'm used to seeing," said Paul Fronstin, director of the health research and education program at the Employee Benefits Research Institute, an employer-funded group.

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