More Strikes over Employers Taking Back Health Benefits

About 70,000 United Food and Commercial Workers union members at more
than 850 grocery stores in Southern California on Saturday went on
strike after contract negotiations between the workers and store
officials from Albertsons, Kroger's Ralphs and Pavilions and Safeway's
Vons failed, largely because of disputes over health benefits.
Unionized mechanics working for the Metropolitan Transportation
Authority in Los Angeles County on Tuesday also went on strike,
bringing bus service to a halt in the area after negotiations broke
down primarily over health benefits.

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.  Albertsons and Ralphs
locked out employees Sunday morning, and employees have been told they
cannot work for "an indefinite period of time."  Retired UFCW workers
were in the Alliance for Retired Americans demonstration against
Medicare privatization at Rep. Bill Thomas' office recently.

The mechanics, who are members of the Amalgamated Transit Union, had
been working without a contract for more than a year. "Maybe we can
tap into some of that $87 billion from George Bush's war budget," a
mechanic said on the picket line at MTA headquarters. "You know, I
think you could probably cover every single state budget deficit in
the country with what we're spending this year in Iraq."

To hear an ABC news segment on this (uses Real Player)
http://www.californiahealthline.org/members/basecontent.asp?collection
id=14&contentid=49982&contentarea=35752&playerid=1089




Los Angeles Times, October 14, 2003

Rising Health-Care Costs at Heart of Labor Strife

By Nancy Cleeland and Marla Dickerson Times Staff Writers


When Southland supermarket workers went on strike Saturday, their main
beef was an employer proposal to cut back their health plan. Mechanics
with the Metropolitan Transportation Authority are squawking over the
same thing.  And health benefits are key to the contract fight that
has prompted a sickout  by Los Angeles County Sheriff's deputies.

Around Southern California and across the country, attempts by
employers to curtail medical benefits have become the top issue in
labor contract talks, setting off a wave of strikes and other job
actions that are likely to escalate as health insurance costs continue
to balloon.

"It's at the core of every major contract struggle," said Kate
Bronfenbrenner, director of Labor Education Research at Cornell
University. "And it's going to be an issue until we see some national
solutions."

In fact, at least half the strikes in California this year have been
staged over health benefits, according to Ken Jacobs, a researcher at
the UC Berkeley Labor Center. He counted 11 such work stoppages in a
four-month period this year in Northern California.

They have affected the public and private sector, small and large
employers, skilled and unskilled workers. At a Dodge dealership in
Colma, 15 mechanics are walking the picket line to fight for their
health benefits. In Southern and parts of Central California, 70,000
supermarket workers are doing the same.

Those workers join wireless technicians, auto workers and other union
members nationwide who have agreed to wage freezes and plant closings
but draw the line at paying more for health insurance.

Michael Rosales, a Ralphs meat cutter for nearly three decades, has a
daughter who seven years ago was found to have a brain tumor. "To this
day," Rosales said, "she's on medication that would probably break us
without  this plan. That's why if I have to stand on a picket line to
fight for these benefits, I will."

There are scores of stories like his among the pickets in front of
Vons, Pavilions, Albertsons and Ralphs stores from San Luis Obispo to
the Mexican border. A mother whose two young children suffer from
kidney problems. A diabetic. A cancer survivor.

They speak gratefully of a health plan that they know is among the
finest  in the country for hourly service workers. Those benefits,
many say, have kept them on the job and loyal to their companies
despite unpredictable  part-time hours.

Employers, however, say health-care cost increases are so extreme that
they can no longer afford to soak them up unilaterally. The
supermarket chains, in particular, say they are facing a double whammy
of soaring insurance premiums and intense pressure from nonunion
retailers to lower their  prices.

"It doesn't surprise me that the union is trying to hang on" to such
rich benefits, said Jim Foreman, managing director of health and
welfare for Towers Perrin, a New York-based human resources consulting
firm. "But it's just not realistic. No employer can continue to absorb
the double-digit increases we've seen in health-care costs over the
past few years or expect to pass them along to customers The [profit]
margins, especially in the grocery business, just aren't high enough."

Still, many of the grocery workers represented by the United Food and
Commercial Workers union view the markets' proposal to cut health
benefits as a betrayal, a reneging on a deal. Through decades of hard
bargaining and strikes, the UFCW in Southern California won what is
widely regarded as a Cadillac contract.

Workers pay no premium for full family health insurance < a perk
enjoyed by workers at only 4% of large employers nationwide, according
to a survey by the Kaiser Family Foundation, an independent research
group not affiliated with managed-care provider Kaiser Permanente.

The benefit is particularly unusual for the retail industry, whose
wages  and benefits tend to lag behind those of other industries,
according to the study's author, Gary Claxton.

"It's extremely uncommon," Claxton said. "It's hard to think of any
industry [that supermarket workers] could go to get that good a
health insurance package with no contribution."

The big supermarket chains < Ralphs parent Kroger Co., Albertsons Inc.
and Safeway Inc., which owns Vons < pay their health-care
contributions into a trust fund that is jointly administered by the
union and the companies. Through recent contracts, the employers have
pledged to contribute whatever it takes to maintain benefits at
current levels. These include dental and vision care, as well as a
full health plan at Kaiser or through another  HMO.

The amount of contributions has fluctuated in the last decade, with
cost-containment measures such as limiting chiropractic care added
over time.

According to UFCW officials, the employer contribution in 1993 was $3
per hour per employee, compared with $3.85 per hour per employee now.
That's an average 2.5% annual increase < far below the national rate
of health-care inflation. The way the union sees it, this shows that
the supermarkets can afford to provide the same level of benefits they
always have.

But the companies view the situation much differently. They point out
that their required contribution to the health plan fell during the
mid-1990s, a period in which medical inflation was held in check. When
the last contract was signed with the UFCW, their share amounted to
$2.44 per hour per employee < meaning their contribution has jumped
58% in the last four  years.

Today, the supermarkets are trying to cap their hourly contributions.
Their proposal calls for a far lower rate of growth than the 13%
annual increase projected for health-care costs. The union estimates
that under this arrangement, the fund would have to cut benefits for
members or raise deductibles drastically.

Rick Icaza, president of UFCW Local 770 in Los Angeles, said workers
could lose dental and vision benefits, and might have to pay 50% of
the cost of doctor visits, drugs and hospital stays. Union members
also would have to contribute to premiums for the first time, at least
$780 a year for family coverage.

Icaza said that's a non-starter in negotiations.

But someone will have to pay. Health-care premiums nationwide have
grown at double-digit rates in recent years < 13.9% this year < far
outstripping the overall pace of inflation, which is running at just
over 2%, according to the Kaiser foundation survey.

Experts say a host of factors are driving the rapid increase.
Consolidation in the health-care industry has reduced competition,
giving medical providers more leverage in pricing negotiations with
employers and  insurers. New drugs to treat everything from depression
to impotence have spurred consumer demand for prescriptions.

Technology has played a role. "It used to be an X-ray was fine. Now
everyone wants an MRI," Foreman, of Towers Perrin, said. "We're all
paying for  that."

To cope with the rising costs, Foreman said, employers are requiring
workers to shoulder a bigger share of the financial burden, from
higher co-pays and deductibles to paying a larger percentage of
premiums.

The typical family health insurance policy provided by an employer
costs $9,068 a year, according to the Kaiser survey, with the average
worker picking up 27% of the tab, or $2,412. That's a 50% jump over
the last three years.

In California, employer premiums rose 13% from 2001 to 2002, said
Jacobs of UC Berkeley. In that same time, worker contributions jumped
32%, he said.

Some employers are cutting health insurance altogether, or raising
premium contributions to a point where workers are no longer taking
the benefits.

In 2002, the number of Americans who lacked health coverage rose 5.7%
to 43.6 million, the biggest jump in a decade, according to the Census
Bureau. The largest part of the increase came from people losing
coverage through the workplace.

In 2001, more than 6 million Californians lacked health insurance at
some time during the year, the majority of them working people and
their families, according to the UCLA Center for Health Policy
Research.

Health benefits are one strong advantage unions offer to workers, and
they fight hard to keep them.

"This is a major issue," said Dan Garces, executive director of the
Los Angeles Sheriff's Professional Assn., noting that his union's
members are facing a large jump in the cost of basic health coverage,
from virtually nothing to $972 annually. Trying to preserve medical
benefits "comes before their pay."

In 2002, unionized workers in California were 42% more likely to be
covered by health insurance than those who were not in unions, Jacobs
said. The  next few years could determine whether unions maintain that
advantage or lose  one of their strongest selling points.

To reduce competitive pressures on their own employers, unions are
pushing nonunion companies to offer health benefits to workers. That
would  eliminate a key argument made by supermarket chains in this
latest contract battle. The companies say Wal-Mart Stores Inc., which
soon will sell groceries in California, and other nonunion grocers are
setting a new, lower market rate for labor < and they have no choice
but to match it.

Such arguments prompted organized labor to lobby for a new law that
would require businesses with more than 20 workers to provide
health-care  coverage and pick up 80% of premiums, or pay into a state
fund that would do it for them. Under the new law, businesses with 200
or more employees would have  to provide coverage for workers and
their families beginning in 2006. Smaller firms gradually would be
required to offer similar benefits.

Lawmakers say the legislation would extend health-care coverage to 1
million uninsured Californians. But businesses have said it was a job
killer that would discourage companies from growing and hiring.

In the end, said Jacobs of UC Berkeley, the law would help the state
cope with rising health-care costs by relieving some of the burden of
caring for the uninsured. The law, said Jacobs, "is designed to level
the playing  field up, rather than down."

Times staff writers Kurt Streeter and Andrew Blankstein contributed to
this report.