Kroger (KR) cuts spousal coverage in Hoosier state; is Cincinnati next?

Local union contract expires October 5

CINCINNATI - The Kroger Co. is eliminating health care benefits for the spouses of its Indiana employees, but company officials won’t say whether that’s the plan for Cincinnati.

“We look at every contract individually to come up with the best solution that works locally,” said Kroger spokesman Keith Dailey.

Negotiations have yet to begin on a contract covering about 12,000 Kroger employees in the Cincinnati area, even though its three-year contract with the United Food and Commercial Workers Union expires Oct. 5.

Spousal benefit reductions were part of a contract ratified by Indiana union members in June. Dailey said it’s the first time that Kroger has included language to shift coverage for spouses from a union-sponsored health care plan to the health care exchanges now being established under the Affordable Care Act, also known as Obamacare.

WCPO reported in May that the Affordable Care Act would emerge as a major factor in labor negotiations for Kroger and that elimination of spousal coverage was on the table in Indiana.

“The Affordable Care Act creates a good viable source for health care that has never been available before,” Dailey said.  “We wanted to be sure that our employees’ spouses continue to have access to affordable health care and (under the new contract) they do through their employers or through the health care marketplaces.”

Kroger employees in Cincinnati have identified livable wages, quality and affordable health care and retirement security as key objectives in upcoming contract talks, said Brigid Kelly, communications director for UFCW Local 75.

“We pride ourselves on offering some of the best wage and health care packages in the region,” Kelly said. “Our members have made a lot of hard choices over the years to maintain really good health care. So, I think that’ll continue to be a priority for us.”

Kelly said there are no bargaining sessions currently scheduled with Kroger. A contract extension is among the possibilities in the next several weeks, she added.

Dailey said the Indiana contract affects about 11,000 employees in the Hoosier state but only 1,700 spouses are impacted by the health coverage changes. Those spouses will continue to be covered under Kroger-funded vision and dental plans. But starting Jan. 1, spouses will receive a one-time transition payment of $1,000 and be required to find coverage through their own employers or shop for coverage through state-based exchanges.

Indiana and Ohio have both opted for the federal government to operate their exchanges, according to obamacarefacts.com . Kentucky is establishing its own exchange. The exchanges are expected to enroll customers starting Oct. 1 for coverage starting in January.

Kroger softened its stance on another health care issue in Indiana. Initially, it raised the idea of limiting health care coverage to part-time employees who work at least 30 hours a week. That’s the level of coverage required under the Affordable Care Act. Under the contract ratified with an 89 percent union yes vote in June, Kroger agreed to cover workers with at least 20 hours per week.

The contract also increased pension benefits and wages. Despite the reduction in spousal benefits, the company said it is spending more on health care under the newly ratified Indiana agreement.

“Health care is a major focus for these negotiations,” Dailey said. “We’re obviously operating in a challenging health care environment (where) costs are skyrocketing. That’s really the primary challenge that we’re faced with in all of our local contracts. In addition the Affordable Care Act create new costs and new benefits that factor in.”

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