Jan. 15, 2010:NWLP
1/12/10
10:23 AM
Page 2
Portland-area UFCW members dropped from Kaiser
By DON McINTOSH
Associate Editor
Nearly 2,000 Portland-area grocery,
meat, and retail workers and their fam-
ilies — 5,700 people in all — were
dropped from the Kaiser Permanente
health system Jan. 1. Their union,
United Food and Commercial Workers
(UFCW) Local 555, blamed employer-
side representatives on the multi-em-
ployer health trust: Management
trustees on the UFCW 555 Portland
Area Employers Health Trust did not
support renewing Kaiser as an option
after rates went up 15 percent for 2009
and 19 percent for 2010.
That left union members and their
families only one choice — a traditional
“indemnity” insurance plan adminis-
tered by Regence Blue Cross Blue
Shield, in which the trust pays 85 per-
cent if patients use doctors and hospi-
tals on a preferred provider list. (It pays
75 percent if they go elsewhere.) Kaiser,
by contrast, is a health maintenance or-
ganization, charging the trust a flat
monthly rate per person for access to a
members-only health care system.
Kaiser is also the region’s most
heavily unionized health care provider,
and it had been an option for Portland-
area grocery union members since
1960. In fact, Local 555 represents
about 800 Kaiser pharmacy and imag-
ing techs, so union grocery workers in-
teracted with members of their own
union when they picked up prescrip-
tions or got X-rays. [Those Kaiser
workers get their health care through
Kaiser under a separate agreement, so
their coverage won’t be interrupted.]
At the time of the cancellation, about
PAGE 2
Negotiators for United Food and Commercial Workers Local 555 present 6,000 member signatures on petitions for
affordable health care, at a Jan. 11 bargaining session at the Holiday Inn on Northeast Columbia and 82nd Avenue
— the first day of a three-day bargaining session. Photo by JD Nyberg, courtesy of UFCW Local 555.
a quarter of the UFCW 555 Portland
Area Employers Health Trust partici-
pants were enrolled in Kaiser.
“What we’re seeing is the national
health care crisis being borne out in
Portland, Oregon,” said Local 555 Sec-
retary-Treasurer Jeff Anderson. “If we
step back, it’s part of a much bigger
problem in health care.”
Health care costs are rising every-
where, and how to share that burden is a
key item of disagreement between Lo-
cal 555 and the Portland-area multi-em-
ployer group that includes Fred Meyer,
Safeway, and Albertsons. The health
trust gets nearly all its funding from a
per-hour employer contribution that is
negotiated as part of a set of multi-em-
ployer collective bargaining agree-
ments. The last set of agreements ex-
pired July 1, 2008, and their terms were
extended while a new set is negotiated.
But that means employers aren’t obli-
gated to increase their health care con-
tributions, even though costs are rising.
That gave the trust less room to maneu-
ver when it was hit with Kaiser’s pro-
posed price increases.
Kaiser is frequently the lowest-cost
option offered by union health trusts,
but in this case, it was more expensive,
per member, than the alternative.
Kaiser’s strong points — prevention
and efficient management of chronic
health conditions — may have made it
more likely for members with chronic
conditions to choose Kaiser over the
trust’s indemnity plan. Compared to
those on the indemnity plan, the trust
participants who enrolled in Kaiser
tended to be older, have larger families,
and have higher utilization rates for
NORTHWEST LABOR PRESS
health care services. Cost-saving meas-
ures by the trust may also have con-
tributed to Kaiser being the more ex-
pensive option. The trust made its
indemnity plan the default for new em-
ployees in their first year, and those tend
to be younger, healthier individuals.
And in August 2009, the trust moved
to require members to contribute a por-
tion of the premium if they wanted to re-
main in Kaiser. That may have led
younger, healthier workers — who also
tend to have fewer dependents and be at
the lower end of the wage scale — to opt
for the free indemnity coverage rather
than stay in Kaiser for $19.41 a week.
The 19 percent 2010 increase would
have cost the Trust approximately an ad-
ditional $300,000 per month, according
to a letter Fred Meyer sent employees.
If participants were to pay the increase,
that would have meant weekly contribu-
tions would rise as high as $48.16.
For over a year, Kaiser and the trust
held complex negotiations over prices
and benefit levels, and disagreed over
rates and what was owed. In the end
they failed to reach an agreement.
Fred Meyer spokesperson Melinda
Merrill told the Labor Press that Kaiser
was asked to match the Regence rate for
equivalent services, but did not. In a let-
ter to employees, Fred Meyer seemed
to blame Kaiser for the separation, say-
ing that the health care provider was
asked to work with the trust to get ben-
efits costs down, but refused and termi-
nated the contract.
Kaiser spokesperson Dave North-
field, on the other hand, said it was the
trust’s decision to terminate the con-
tract, not Kaiser’s. The loss of the trust’s
business won’t lead to layoffs at Kaiser,
but it was not a move taken lightly,
Northfield said: It was the fifth largest
group in Kaiser’s Northwest Region.
Anderson said members were upset
about the loss of Kaiser, but understood
it was not an outcome the union wanted.
“UFCW is pro-Kaiser, very much
so, and we look to the day that we’re
able to go back,” Anderson said.
“These union employees have given
up wages over the years as a trade off to
keep their health care insurance,” said
UFCW International Representative
Jenny Reed. “For 19 months now, em-
ployers have been at the bargaining
table trying to whittle away their em-
ployees’ health insurance and wages.”
On Jan. 11, day one of a three-day
bargaining session, Local 555 presented
a petition for affordable health coverage
to the multi-employer bargaining team.
Signed by over 6,000 members, it was
meant to show that union members sup-
port their bargaining team.
The petition was a key purpose of
store-by-store visits like the Oct. 15 ap-
pearance by eight union representatives
at a Hillsboro Fred Meyer. Reps entered
the store and tried to talk to members
about the petition, but a store manager
ordered them out and called police, and
three were arrested for trespass, includ-
ing Local 555 President Dan Clay. The
January court date was expected to be
postponed to March.
A “treat us fairly” candlelight vigil
is tentatively planned for Feb. 2 at 4:30
at Interstate Fred Meyer to show sup-
port for Portland-area grocery workers.
Participants will gather at the Carpen-
ters Local 247 hall, 2215 N Lombard,
and march to the Fred Meyer store.
JANUARY 15, 2010