Wednesday, August 26, 2009



The Chicago Sun-Times reports in today’s (i.e., Wednesday 8/26’s) issue that workers at SK Hand Tool, a relatively small company with operations on Archer Avenue in Chicago and in McCook, Illinois, learned that their health care coverage had been cancelled only after inquiring about the absence of deductions from their paychecks for insurance premia. No notice, no nothing. Just something like “Sorry, you no longer have health insurance.” In response, an unfair labor practices strike has been called by Teamsters Local 743, which represents SK workers, and, as of this writing, is ongoing.

The legalities of the situation are murky. While labor law has long established that benefits, like health insurance, are a legitimate bargaining issue, the contract between the workers and SK Hand Tool had expired in February. No new contract has been reached. The union argues that there was absolutely no discussion of health care benefits before those benefits were dropped. The company does not deny the lack of discussion, but does say that dropping the benefits was not its decision. SK argues that cancellation (again, without notice; one can make the case for dropping health coverage, but for doing so without notice? That is reprehensible.) was “due to a third-party’s decision to remove coverage, which was beyond our control.” While that might be true, the very turbidity of that statement, along with its not making sense even if it were as clear as crystal, makes it awfully hard to believe.

While the legality of SK’s actions may be subject to debate, the morality of discontinuing people’s health care coverage without giving them notice is not. Not only do people count on their employer provided health care coverage, many employees at SK, like people everywhere, were in the middle of some form of medical treatment or regimen and, having found out that they weren’t covered, after the fact, are out thousands of dollars. Given that the average hourly wage at SK is $14, the decision to cancel health insurance without notice has resulted in the financial ruin of some SK employees and the potential financial ruin of the rest. Maybe, as SK argues, cancellation without notice wasn’t the company’s decision. But someone did something despicable.

What is even clearer than the morality of this case is the support it provides for the utter inanity, if not insanity, of tying health insurance to employment. As loyal readers know from every post I have produced on the “health care” (See, inter alia, my 8/23/09, 8/13/09, and 7/1/09 posts.), I am truly agnostic on this issue, a genuine rarity for yours truly. But I am certain, or at least as certain as I can be about anything, that any genuine reform of the health care insurance system has to at least move in the direction of breaking the tie between employment and health insurance coverage, a relic of yet another government misstep, the price controls of World War II. The case of the workers at SK provides further evidence that trying to reform health care through “employer mandates” or “employer subsidies” will not go to the heart of the problem.

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