Kroger Co., the nationwide retailer with more than $80 billion in sales, trimmed more spouses from its health coverage with the ratification of a major union contract in late July.
Kroger has been targeting spousal coverage as a way to reduce costs. The latest agreement, with the United Food and Commercial Workers union in the Cincinnati/Dayton, Ohio, area, actually represents a less severe spousal coverage reduction than earlier agreements.
As reported in the Dayton Daily News and other news services, the agreement effecting 17,700 union employees only ends coverage for spouses who have health insurance through another employer, or can’t get coverage at work because the plan doesn’t comply with the Patient Protection and Affordable Care Act.
Last September, Kroger executed a new agreement with the UFCWU in Indiana that phased out all spousal coverage. The union said it had reluctantly agreed to the condition so part-time employees working as few as 20 hours a week would have access to company-sponsored coverage.
Earlier this year, Kroger negotiated a new agreement covering 23,600 workers in 175 stores in Atlanta and Savannah that eliminated all spousal health coverage. Again, the union exchanged the spousal coverage elimination for part-time coverage for more workers.
Kroger employs more than 300,000 workers at its nearly 4,000 stores, many of them covered by labor agreements.
Kroger noted that the Cincinnati/Dayton agreement doesn’t end all spousal coverage.
“We will continue to provide health coverage for current eligible spouses if they don’t have coverage through their own employment,” a Kroger spokesperson told the Dayton Daily News.
“It’s really an effort to make sure members of their family still have access to affordable health care,” UFCWU spokeswoman Brigid Kelly told the newspaper.
Following the Atlanta/Savannah agreement, local 1996 president Steve Lomax wrote an open letter to union members in which he blamed the PPACA for increasing costs to employers, leading to the need to cut costs elsewhere:
“One of the choices that we had to make was to either discontinue spousal coverage or discontinue healthcare coverage for anyone working under 30 hours per week. We also faced the possibility of having to increase co-pays to astronomical amounts, or drastically scale back healthcare coverage for all,” Lomax said.
“That is why … we made the hard choice of discontinuing spousal coverage. It allowed us to maintain affordable weekly contributions for all Kroger workers, including part time workers who work as few as 12 hours per week. Members may continue to cover their dependents, as well as purchase additional dental and vision coverage for their spouses at $2 per week. We were able to keep affordable part time coverage, despite the trend of other major employers like, Target, Home Depot, Trader Joes and Walmart dropping part time coverage.
“UFCW Local 1996 members are insured through Taft-Hartley health plans. Unfortunately, the new health care law does not treat Taft Hartley plans in the same way as it treats insurance companies. Specifically, the new health care law does not allow our union to open up the plan to everyone so that people could choose to use Affordable Care Act tax credits to buy union-sponsored plans. This makes it more expensive for our plan to continue covering spouses. In addition, Kroger said they found it difficult to justify spending thousands of dollars per month on spousal health care when the Affordable Care Act means that spouses can utilize tax credits and subsidies to find comparable coverage through an exchange.”