Melnick and other experts said coverage for the current employees probably would deteriorate over the three-year contract. That's because that pool of workers would age, requiring more health services and prescriptions. Younger, newly hired workers, who would normally subsidize those costs, instead would be part of a separate plan.
By the final year, "it will look ugly," said Gary Claxton, vice president of the Kaiser Family Foundation, a nonprofit research group.
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.
In an effort to counter the supermarkets' message of modest premium payments, the UFCW on Wednesday made Abrams, the union's benefits consultant, available to the news media.
Abrams sought to explain why the initial $4.04 hourly contribution was inadequate given that employers fund the current plan with a contribution of $3.85.
By switching from the old pay-whatever-it-takes formula to a fixed-contribution plan, he said, the health plan trustees would need to build up a six-month reserve, or about $300 million, to cover unanticipated costs. That would effectively cut the value of the employers' contribution by 85 cents an hour, Abrams said.
The supermarket official who spoke on condition of anonymity agreed that trustees would need to create a reserve, but said it could be for as few as three months, not six.
At Wednesday's news conference, Abrams was asked to sum up the union's position . He said, "The employers were looking for changes that were just insane. This offer would destroy the health-care plan in a short number of years."
