[PEN-L:11803] Teamsters Face Possible Health Insur. Cutoff

[Michael Eisenscher <meisenscher@xxxxxxxxxxx>]

The Wall Street Journal Interactive Edition -- August 15, 1997
 UPS Walkout Sparks Concern
 About Health-Care Coverage

 By NANCY ANN JEFFREY
 Staff Reporter of THE WALL STREET JOURNAL

 The 12-day-old walkout against United Parcel Service of America Inc. is
 apparently sparking health-care concerns among the families of some striking
 workers.

 Corporate employee-benefit representatives say they've been getting worried
 calls about health coverage from people identifying themselves as spouses of
 striking UPS workers. The callers want to know whether they can add a
 striking spouse to their own company's health coverage, or pick up that
 coverage themselves if they've declined it in the past.

                       "These people are very nervous," said Deborah
                       Rappaport, a senior consultant for the Kwasha
                       Lipton Group of Coopers & Lybrand. Kwasha
                       Lipton acts as benefits administrator for some
                       large employers.

                       So far, these concerns appear to be unfounded.
 UPS's 185,000 striking Teamsters still are getting fully-paid health benefits
 through either UPS-administered plans or multiemployer health and welfare
 plans. Included are both full-time and part-time employees.

 But whether those fully-paid benefits will continue if the strike is
prolonged is
 unclear.

 September Contributions

 In the normal course of business, UPS's next contributions to many of the
 multiemployer plans would be due in September, said Dale Whitney, an
 employee-benefits manager for UPS. But without a contract, he said, the
 company has no plans to make those payments.

 Mr. Whitney wouldn't say whether the company would continue to make
 payments for health costs of striking workers covered under
 UPS-administered plans. The company has made those payments so far, he
 said, but has no obligation to keep making them.

 "The minute the employees go on strike, UPS no longer has the requirement to
 provide health care," he said.

 Charles Rader, director of the Teamsters Office of Benefits Research, said
 that in past strikes, workers covered under the multiemployer plans generally
 have continued to receive fully-paid health benefits.

 As for workers in the UPS-administered plans, the company is required under
 the plans to continue to pay workers' health costs until early September, Mr.
 Rader said.

 But Mr. Whitney of UPS said a 31-day extension-of-coverage provision for
 terminated employees doesn't apply to strikers.

 Alternatives Available

 If UPS were to stop paying for health care, workers wouldn't have to go bare.
 They could choose to continue their health coverage for as many as 18 months
 under Cobra, a federal law that provides for an extension of workplace-health
 benefits for employees who leave a job.

 The coverage wouldn't be cheap. The striking workers would have to pay the
 full cost of their benefits, plus a surcharge of 2%.

 Some workers also might get coverage under health plans offered by the
 employers of their spouses.

 While most companies allow employees to add a spouse or make other
 changes to their health coverage only during annual open-enrollment periods,
 many do allow such changes during the year to accommodate certain changes
 in family circumstances.

 These changes include the birth or adoption of a child, marriage, divorce and
 the death of a spouse. They also include the loss of a spouse's health coverage
 because of a change in employment.

 The basic guidelines for midyear changes that individual companies may or
 may not allow are defined by the Internal Revenue Service. Although the IRS
 hasn't specifically ruled on the question of a strike, "it is our informal
opinion
 that a strike would be considered a change of family status," an IRS
 spokeswoman said.

 Will Applegate, a senior consultant with the Kwasha Lipton Group, said it is
 likely many employers would allow such a change.

 Under the health-insurance portability law passed last year, many companies
 will be required to allow such changes during so-called special enrollment
 periods, said Chip Kerby, a principal with benefits-consultant William M.
 Mercer Inc.