Health Care Uncertainty Impacts Labor Talks

Health Care Uncertainty Impacts Labor Talks

WASHINGTON — Uncertainty over changes in national health care policy has emerged as an issue in supermarket labor contracts.

Union employees of Giant [4] and Safeway [5] stores in Washington and Baltimore last week agreed to a new contract with an unusual duration of 19 months, a period during which both sides hope to gain more visibility into the potential financial impacts of changes set to take place as a result of the Patient Protection and Affordable Care Act (ACA), the sweeping changes in national health care policy approved two years ago. Although provisions of the act have been gradually rolled out since March 2010, a flood of new regulations still awaits, much of it tangled in political and legal challenges that have made the difficulty of forecasting the future one thing employers and labor strongly agree on.

“The 19-month contract duration was mutually agreed upon by all parties,” Jamie Miller, a spokesman for Ahold’s Giant-Landover chain, told SN last week about a the new contract covering 17,000 Giant associates represented by the United Food and Commercial Workers. “The contract duration is related to uncertainty over the Affordable Care Act. All parties decided it would be beneficial to have greater clarity on the direction of health care legislation in order to address implications to our 17,000 associates represented by UFCW Locals 400 and 27.”

Union labor contracts in the supermarket industry typically run for three or four years. The 19-month deal agreed to by Giant and Safeway workers last week — one of the largest to be negotiated in the supermarket industry this year — would cover workers through October 2013. Numerous provisions of the ACA are scheduled to become law in January 2014, including the establishment of insurance exchanges allowing employees to buy their own insurance with money their employers would otherwise contribute to a company plan; and penalties for employers who do not offer health care.

Many of the provisions are facing challenges from states and other organizations.

Supermarkets and their labor force in particular in the meantime are still awaiting final regulations on how the new laws will affect Taft/Hartley multi-employer funds, Nicky Coolberth, a spokeswoman for the UFCW national office, told SN last week.

Union representatives elsewhere in the country said they also recognize health reform as a growing concern in negotiations.

“Currently, there is a lot of uncertainty and some confusion with the law that makes negotiating a contract that spans from before implementation to after implementation quite difficult,” Coolberth said.

Some UFCW locals that have contracts still to be renegotiated this year said the reforms would be an issue. UFCW Local 5, San Jose, Calif., is discussing the possibility of a two-year deal with Safeway, Ron Lind, president of Local 5, told SN.

“There’s a reluctance from Safeway to do [a two-year contract] since it would align the contract expiration in Northern California with the expiration of the Southern California agreements, but there are so many issues on the table, we haven’t reached any decisions on that yet,” Lind said.

In Dayton, Ohio, UFCW Local 75 is negotiating a deal with Kroger [6] that will consider the impacts of provisions already in place under ACA — such as allowing individuals to remain on their parents’ health plans up to age 26 — while keeping an eye on changes ahead, Brigid Kelly, a spokeswoman for the union, told SN. Local 75’s contract, covering 4,000 workers, expires in June.

“A lot of the challenge is no one really knows what the future of Affordable Care is going to look like,” she said.

— Additional reporting by Elliot Zwiebach