These Days, It’s All About Healthcare

In a climate where large pay increases are increasingly hard to come by, guess what the main focus of negotiations between employees and employers these days is? You guessed, the cost of healthcare benefits. As insurance costs skyrocket, and employers seek to reduce these costs by reducing benefits and increasing employees share, employees and union negotiators are working hard to try to hold the line on these costs, so that workers don’t suffer a de facto pay decrease caused by paying significantly more each month for health benefits. Good health care is expensive–no doubt about it…and employees used to a certain level of benefits don’t want to see a decline. But will this cause employers seeking to hold the line on costs to also demand more accountability from employees for their lifestyle choices? We’ll see, but it could happen.

In Rockville, Maryland, employees are picketing a local department store, over the issue of who controls the employee health plan. At the Sym’s Department Store, workers hold protest signs and distribute leaflets to store customers over the store’s plan to take over control of the health plan, replacing a program jointly managed by the store’s union and management. (See Washington Post article.) Why all this fuss, when the store is not currently proposing to reduce benefits or charge employees more? Store employees Winona McCullough and Sophya Eydenson say it’s because health care is the most important issue for employees. Without the union’s involvement, employees could pay more in the future (especially since, employees claim, the company has refused to provide contractual guarantees preventing additional costs), so protesting the change now is important.

General Electric narrowly averted a strike after reaching an agreement with its employees who were members of the International Union of Electronic Workers-Communications Workers of America. (See New York Times article.) Again, the biggest issue at stake in these negotiations was health care: GE originally had hoped to have its employees shoulder 30 percent of overall health costs, while the union sought to maintain the current rate of 18%. G.E. executives argued early on that it was only fair for workers to absorb more of the health costs because the company’s health bill soared ann additional 45 percent, to $1.4 billion, last year, with the per worker cost rising to $6,500 this year. Union officials maintained that the General Electric, one of the world’s most profitable companies, should absorb the additional cost, as the company earned more than $45,000 in profits per employee last year. While workers’ health care costs will still go up significantly, as a result of the signed contract, they will not be assuming a greater percentage of the total as GE had originally sought, and an accompanying wage and benefit increase more than offsets the difference. (See GE Workers United release.)

The success of GE’s union is an example for other employees to emulate: experts predict that it will favorably influence upcoming negotiations at Verizon Communications and with the Big Three automakers, General Motors, Ford and DaimlerChrysler, where contracts all expire in September. The union attributes its success to a two-day walkout earlier this year, GE’s first national strike in over 30 years. According to IUE-CWA President Edward Fire, “[t]he two-day strike drew a line in the sand that GE could not cross. Our members won this settlement through their sacrifice on the picket line on those two bitterly cold days in the dead of winter this past January.” Employees at several other corporations have followed this approach as well: other recent walkouts include 3,000 employees at Hershey Foods Corp. who participated in a 44-day strike last year, a two-week strike by machinists at Lockheed Martin Corp. in April, and a three-week October strike by janitors in Boston.

Public employees will not be so lucky, however, as those at GE. The California Public Employees’ Retirement System (CalPERS) just announced an increase today in copayments for its 900,000 members insured by health maintenance organizations. (See San Diego Union Tribune article.) CalPERS’ premiums also went up as well, which will force public agencies, most already strapped for cash, to look for alternatives to CalPERS, and may ultimately cost employees more, depending on the outcome of future contract negotiations. (See San Francisco Chronicle article.)

Regardless of the outcome of future employee-employer negotiations over health care, and who bears the brunt of increased expenses, it appears likely that employers will increasingly be looking for ways to reduce health care costs. One recent article reports that a group of large employers, including Ford, General Mills and PepsiCo, have joined forces in a campaign to encourage overweight workers “to slim down as a way to improve both their personal health and the corporate bottom line.” (See New York Times article.) (I’m sure the products those companies sell have absolutely nothing to do with obesity, right?) The article, however, is relatively silent as to what corporate activities are planned, aside from posting nutritional information in company cafeterias, and encouraging employees to take the stairs (not feasible in some locations and for some individuals, including those who are already disabled or who have health problems resulting from severe obesity). Will the companies that don’t already do so: cover weight loss programs not currently covered by insurance plans? change the food sold in the company cafeteria and vending machines? provide on-site workout facilities? And with the ongoing battle about which weight loss plans are most effective (low-fat, low-carb, or a balanced plan), will the companies be forced to make controversial decisions about which plan to promote? Certainly employees should be on guard that plans to in some way penalize or discriminate overweight employees do not creep into these workplace initiatives, as weight discrimination is not sufficiently protected under the law in most parts of the country. (See Anti-Weight Discrimination Laws.) However, employers who are unable to pass along their health care cost increases onto employees, are also going to be looking for a way to hold the line on those expenses, so some workers may ultimately pay the price, not just in higher health care costs, but also in increased discrimination and employer involvement in their personal lifestyle choices.

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.