HEALTH CARE AT CORE OF NEW LABOR FIGHTS.

Byline: Evan Pondel Staff Writer

Rising health care costs - more than any other issue - lie at the heart of current labor disputes and nearly every worker, business and government agency will face problems with health care expenses in the next few years, experts said Monday.

Double-digit increases in health care premiums have resulted in management passing more of the cost on to employees, and many workers are not willing to part with the rich benefit packages that have been largely picked up by their employers for decades.

``Health care is the No. 1 issue that has led to strikes and walkouts,'' said Kent Wong, director of the Center for Labor Research and Education at the University of California, Los Angeles.

``Health care benefits have always been a major contentious issue at the bargaining table, and they are clearly the big issue when it comes to the current supermarket campaign.''

For many workers, health care coverage is almost more important than higher wages. Supermarket workers went on strike over employer insistence on reducing the cost of health care and other benefits while increasing employee contributions.

County sheriff's deputies engaging in sickouts and Metropolitan Transportation Authority mechanics gearing up for a strike are opposed to similar proposals in their ongoing contract disputes.

Wong said a two-tiered system is a tactic management utilizes to lower solidarity among employees. ``But the ultimate effect is an overall erosion of employee benefits,'' he said.

Under the last proposed contract, supermarket workers would contribute $20 a month for a single employee and $60 a month for family coverage. The average contribution in California last year was $28.50 for a single person and $150 for a family, according to the Kaiser Family Foundation, which monitors health care costs.

Experts say private and public sectors will continue to grapple with rising health care costs and workers are feeling the squeeze in many industries, especially as open enrollment season nears. So far, premiums have risen an average of 17.7 percent in Los Angeles this year, according to a survey released Monday by Hewitt Associates.

MTA mechanics were poised to strike early today, contesting the control of their benefit fund. And deputies have waged a blue flu campaign at the county's courts and jails for the past two weeks.

The Amalgamated Transit Union represents about 2,000 MTA mechanics, who earn $50,000 annually on average; service workers who earn $30,000 a year on average; and a group of 500 retirees.

The MTA said an audit confirmed that the fund is losing $400,000 a month - a point the union agrees with as it presses the MTA to increase employer contributions toward health care benefits.

``Right now, the ATU pays zero in terms of health care insurance,'' MTA spokesman Marc Littman said. ``Instead of paying more for health benefits, we're saying there is only so much money to go around so you (the ATU) decide how you want to spend it.''

The Association of Los Angeles Deputy Sheriffs has also asked for enough money to offset double-digit increases in health insurance premiums and doubling of co-payments for doctor visits and prescription drugs. The association did not return phone calls Monday.

The International Longshore and Warehouse Union reached a deal in January that included no-cost health insurance.

The International Machinists and Aerospace Workers said a raise proposal by Lockheed Martin was below the aerospace industry average and that changes in the amount of money coming out of employees' pockets for health insurance would wipe out the raises.

``Obviously, the health care system is in serious disarray,'' said Paul Devore, chief executive officer of Financial Management Services Inc. in Encino. ``Costs continue to go up, and employers are trying to get handle of the situation.''

Among those employers is Kroger Co., the Cincinnati-based operator of Ralphs. The company said its continued success is dependent on its ability to reduce operating expenses, ``including managing health care and pension costs contained in ... collective bargaining agreements.''

``Earnings per share growth goals could be affected by continued increases in health care, pension and credit card fees,'' according to Kroger's most recent filing with the Securities and Exchange Commission.

``I'd say the profitability is too thin and sales are not getting better resulting in an imbalance for health benefits,'' said Jason Whitmer, analyst with FTM Midwest Research who covers Kroger. ``Unions have had a pretty sweet deal thus far.''

For decades, supermarket workers have been attracted to the industry because of the lavish benefit packages. But employers are now struggling to maintain those benefits, and that is a focal point for many of the striking supermarket workers.

George Hartwell, president of the United Food and Commercial Workers Union Local 1036 in Camarillo, is not afraid to tout the health care benefits workers have received in the last 40 years.

``I'll brag about our benefits to everyone,'' Hartwell said. ``While we may not have the best jobs in the world, we have good benefits and good pensions. And we want it to stay that way.''

Staff Writer Lisa Mascaro contributed to this report.

Evan Pondel, [phone]

evan.pondel(at)dailynews.com

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RISING COSTS

SOURCE: The Kaiser Family Foundation/Health Research and Educational Trust

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