It started with 11,200 Kroger workers in Indiana. But will a new labor agreement that axes health coverage for employees spouses eventually spread throughout the rest of Kroger's 343,000-person workforce?
Kroger is the nation's largest grocery store chain, ranked #23 on the Fortune 500 list with nearly $100 billion in revenue. But retail margins are historically thin, and citing belt-tightening measures, Kroger took a whack at its health coverage package at its Central Division in Indianapolis.
What emerged from contract negotiations with the United Food and Commercial Workers Union Local 700 was a new deal for workers there. The company said it was a better deal — pension fund pump-ups, health benefits for part-time workers who work as few as 20 hours a week, pay hikes.
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But gone is coverage for employee spouses. To soften the blow, Kroger will cut each affected employee a check for $1,000. One angry Indianapolis worker told Indiana Public Media the new deal was a very bad deal for he and his wife, a Kroger retiree with ovarian and colon cancer who now would lose her insurance coverage.
"All the time we were working, we never used the insurance at all," he said. "My wife came down with ovarian cancer and had colon cancer at the same time. We've dealt with that since October of last year. But now that we really need it, Kroger takes it off the table, we no longer have it."
Kroger, at least at one facility so far, joins UPS and other employers in bumping spouses off their benefits plans.
The difference is that the Kroger unit won't cover any spouses, while UPS is just knocking off spouses who work elsewhere and are offered health coverage through their employer.
Kroger took a different tack from UPS ideologically. UPS blamed the Patient Protection and Affordable Care Act for its decision. Kroger spokesman John Elliott said the reason his company took this path was the constant increase in health care costs.
"There is a lot of comment about the Affordable Care Act and so on and those mandates are something that we have to factor into those discussion, but frankly, healthcare costs were going up dramatically with or without the Affordable Care Act. It just adds some specific requirements that we have to fund to deal with," Elliott told Indiana Public Media.
The company was careful to point out the limits of the agreement, which apparently set off alarm bells in Cincinnati, where the grocer is based.
Kroger corporate spokesman Keith Dailey told the Cincinnati Business Courier that the union agreement applied to just 15 percent of its workers in the Central Division, and that the rest of the Kroger workforce wasn't covered by the new contract.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
