When Companies Step Up, the Government Can Step Back

There's a popular saying that if the only reason you are staying at your job is for the health insurance, then maybe it's time to look for another career.

Unfortunately, if everybody took that advice to heart, we'd have to chop down every tree on the planet just to print the resumes of those who would seek new employment.

The fact is that health insurance has become an essential component of the relationship between workers and employers, and when employers step up to the plate and do what they can to provide health coverage for their workers, the system works.

The recent labor agreement in Southern California (see Page 1) is an example.

The supermarket chains there deserve a pat on the back for doing the right thing in easing up on the health insurance qualifications for supermarket employees — workers and their families now qualify for health insurance coverage much more quickly than they did under the strike-induced contract of 2004.

In the effort to reduce the high turnover rates that have ensued, a president of one of the union locals told SN that reducing the time that workers and their families have to wait to gain coverage will be more important than even the adjustments in pay scale. Under the new agreement, the waiting period has been reduced to six months for both employees and their dependent children, down from 18 months and 30 months, respectively, and to 24 months for spouses.

The new coverage also includes some incentives to stay healthy, including better coverage for preventative care, and also creates individual health reimbursement accounts, which are designed to force workers to make better decisions about their use of health care services.

The supermarket chains in Southern California that agreed to the new pact — Vons, Ralphs and Albertsons, along with an earlier version agreed to by Stater Bros. and Gelson's — are doing their part to maintain a free-market health care system. Unfortunately, not all employers do so, and the rising costs of health care for the uninsured and underinsured are forcing state and local political leaders around the country to seek more government-intrusive measures. In California, for example, Gov. Arnold Schwarzenegger has proposed a plan that would require employers to either provide insurance for workers or pay into a state fund.

The fact that 14 states and several other smaller municipalities are pursuing similar mandates — even though federal judges have already overturned two such laws — illustrates the dire situation in state coffers around the country.

“The legislators' eyes are focused on what can we do to solve this problem, and the obvious targets are employers,” said James Baker, co-head of the employee benefits practice in the San Francisco office of law firm Jones Day. “There is a lot of data out there that show that there are many millions of people who work in many different jobs that don't provide health-plan coverage.”

That's why supermarket executives in Southern California, after seven months of tough negotiations, should sleep well knowing they reversed their course on health care from the last negotiations.