Grocery Workers’ Health Fund May Run Out of Money in Days
Any day now, the health fund for union supermarket workers in Southern and Central California could run out of money, jeopardizing medical coverage for about 200,000 people.
Trustees who oversee the health plan say the joint union-company fund will be empty by the end of the year because the three supermarket companies in the 9-week-old labor dispute have not made their payments to the fund for November and December -- about $40 million a month.
Administrators of the fund are negotiating with HMOs and other medical providers to avert a disruption of coverage. The United Food and Commercial Workers union has filed a federal lawsuit to force the grocery chains to pony up millions of dollars to keep the fund solvent.
But short of a legal remedy or a contract settlement, tens of thousands of supermarket retirees, workers and their dependents could find themselves without any medical protection in a matter of days, according to union officials.
That could prove pivotal to the outcome of the first supermarket strike in Southern and Central California in 25 years. With its members already straining financially, the UFCW may come under increasing pressure to hammer out a deal with the chains: Albertsons Inc., Kroger Co.'s Ralphs and Safeway Inc.'s Vons and Pavilions.
On the other hand, losing health coverage may instead strengthen the resolve of the workers. The UFCW is fighting to maintain health benefits -- traditionally fully paid by the supermarket employers -- for its 70,000 members in Southern and Central California.
“This is just part of a deluge of pain they’re going through,” said Ruth Milkman, director of the University of California Institute for Labor and Employment. “If anything, it’s likely to make people angrier and more determined.”
Still, the prospect of losing medical coverage has heightened anxieties for many striking and locked-out workers, particularly those in need of medications and treatments.
And it isn’t just those on picket lines who are on edge -- the UFCW-Food Employers Benefit Fund also pays for health care for thousands of employees of Stater Bros. and Gelson’s markets. They aren’t directly involved in the labor dispute, although any contract signed by the UFCW and the three major chains would apply to them.
Amber Scott, a seven-year Vons employee, choked up Wednesday when talking about her health-care needs. The 31-year-old Long Beach woman said she was diagnosed with Hodgkin’s disease last year and must go regularly to her doctor for checkups and undergo tests to monitor her condition.
Of more concern was her 3-year-old daughter, Bleu, who has cystic fibrosis. If they lose their health benefits, she said, it will cost her $5,000 a month for prescription medicines to keep Bleu’s lungs clear and allow her to absorb the nutrients in the food she eats.
“I never thought this would go on this long,” Scott said of the labor dispute. Yet she doesn’t want the union to settle hastily just because of cases like hers.
“I’d hate to have gone out for two months,” she said, “and then give up the fight.”
Losing their union-sponsored, company-paid health benefits would leave few options for Scott and others with preexisting conditions. They would have an unusually hard time finding a carrier on the open market that would sell them health insurance. Even then, the cost would be prohibitive.
Some UFCW members are hoping to tap the federal COBRA plan, which allows workers who have lost their employer-provided health insurance to pay out of pocket the full cost to continue the coverage for at least 18 months.
But “COBRA only requires an employer to provide the coverage he’s providing to everyone else,” said John “Rocky” Miller, a lawyer in Century City and a member of the Labor Department’s advisory council on employee benefit plans. “When the plan stops providing benefits to all of its existing employees, they stop providing COBRA.”
The bottom line, he said: Supermarket workers will have to rely on spouses’ benefits or make do like millions of other uninsured Californians.
Union leaders are acutely aware of what’s at stake. “We have hundreds on dialysis or receiving chemo or whose children need certain prescriptions to stay alive,” said Greg Conger, president of Local 324 in Orange County, one of seven locals involved in the contract dispute.
Conger, who serves as a trustee of the health fund, said he was telling union members “the truth” -- that their health benefits would run out shortly. He expressed confidence that an arbitrator assigned to UFCW’s lawsuit would agree that the supermarkets are contractually required to pay money into the fund. The arbitration process, which began last week, is expected to resolve the debate over how much the supermarkets are required to pay, according to the union’s attorney, Joe Paller.
Union officials say the three chains made their last payment, for $40 million, in October. The union claims the companies are obligated to make contributions through Dec. 31.
Sandra Calderon, a spokeswoman for the Vons chain, disagreed. “We feel we have met our obligation under the current contract,” she said. She would not elaborate. Representatives of Albertsons and Ralphs declined to comment.
Vons and Pavilions employees walked off their jobs Oct. 11 after contract negotiations broke down. Ralphs and Albertsons, which are bargaining jointly with Safeway, locked out their workers the next day.
Conger said the UFCW couldn’t afford to keep the health fund going by itself. If the union loses the lawsuit, “there is no Plan B,” he said. Workers would have to “stay the course.”
Neither Conger nor Sidney Abrams, an actuary hired by the union, could say precisely how much money is left in the health fund, which is used to pay premiums for two health maintenance organizations -- Kaiser Permanente and PacifiCare -- and to operate a preferred provider organization, which generally contracts with a wider network of doctors and hospitals.
Stater Bros. Markets, which has 14,000 employees, has continued to pay into the fund, said Chief Executive Jack Brown. Officials with the Gelson’s chain didn’t return phone calls.
Stater Bros.’ payments, and any from Gelson’s, won’t be enough to keep the plan operating through the end of the year, Abrams said. Employees of those two chains are also at risk of losing their benefits.
After the strike began, Christina Kersey, 24, a Vons clerk from Garden Grove, took a temporary job with Stater Bros. She said she needed the money. As a diabetic, she couldn’t afford to lose her health benefits, either.
For now, the cost of expensive supplies for her insulin pump, which she wears around the clock, is covered.
“My life depends on this medicine,” she said. “This is not a cure, it’s life support.”
Times staff writer Nancy Cleeland contributed to this report.
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On February 12, 2004 the United Food and Commercial Workers Union, which had stated repeatedly that 70,000 workers were involved in the supermarket labor dispute in Central and Southern California, said that the number of people on strike or locked out was actually 59,000. A union spokeswoman, Barbara Maynard, said that 70,000 UFCW members were, in fact, covered by the labor contract with supermarkets that expired last year. But 11,000 of them worked for Stater Bros. Holdings Inc., Arden Group Inc.'s Gelson’s and other regional grocery companies and were still on the job. (See: “UFCW Revises Number of Workers in Labor Dispute,” Los Angeles Times, February 13, 2004, Business C-11)
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