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L. B. Schwellenbach, Secretary
Isador Lubin, Com m issioner (on leave)
A . F. Hinrichs, Acting Comm issioner


Programs Established Through
Collective Bargaining

Bulletin T^o. 841

For sale by the Superintendent o f Documents, U. S. Government Printing Office
Washington 25, D. C. - Price 10 cents


General characteristics of health-benefit programs__________________ *___
Administration of programs________________________________________
Financing of plans_________________________________________________
Benefits provided--------------------------------------------------------------------------Eligibility requirements-----------------------------------------------------------------Transfer and conversion of policies_________________________________
Surplus funds and liquidation of plans______________________________
Enforcement of provisions_________________________________________
Plans administered by insurance companies-------------------------------------------Textile Workers Union of America (C. I. O .)_______________________
United Electrical, Radio and Machine Workers (C. I. O.)___________
International Fur and Leather Workers Union (C. I. O .)-----------------Upholsterers International Union (A. F. of L .) _____________________
United Textile Workers of America (A. F. of L .)___________________
United Furniture Workers of America (C. I. O .)------------------------------Amalgamated Association of Street and Electric Railway Employees
(A. F. of L .)_______________
Industrial Union of Marine and Shipbuilding Workers (C. I. O .)____
Hotel and Restaurant Employees' International Alliance (A. F. of L.) _
Paper Workers Organizing Committee (C. I. O .)----------------------------Union-administered benefits plans--------------------------International Ladies' Garment Workers' Union (A. F. of L .)----------New York City Laundry Workers (C. I. O .)________________________
United Hatters, Cap, and Millinery Workers (A. F. of L .)__________
Jointly administered plans_____________________________________________
Amalgamated Clothing Workers of America (C. I. O.) insurance
United Retail, Wholesale and Department Store Employees of
America (C. I. 0 » )---------------------------

(in ;


Letter o f Transmittal
U n it e d



epartm ent






L abor,
S t a t is t ic s ,

Washington, D. C., July 9, 1945.
The S e c r e t a r y o p L a b o r :
I have the honor to transmit herewith a report on the health-benefit plans es­
tablished through collective bargaining. The study is based on an examination
of approximately 12,000 union agreements in the Bureau’s files, as well as on cor­
respondence and interviews with employer and union representatives. The plans
described cover more than 600,000 workers, but this figure is not necessarily allinclusive of workers covered by benefit plans established through collective bar­
gaining. The primary purpose of this study was not to obtain statistics on the
extent of health-benefit plans, but to learn about the provisions of the more repre­
sentative types.
This study was prepared by Everett M. Kassalow and Jean R. Nelson under
the supervision of Florence Peterson, Chief of the Industrial Relations Division.
A. F.




Secretary of Labor.


in r ic h s ,

Acting Commissioner.

B ulletin 7s[o. 841 o f the
U nited States Bureau o f Labor Statistics
[Reprinted from the M onthly L abor R eview , August 1945]

Health-Benefit Programs Established Through
Collective Bargaining
Provision for health-benefit programs as a part of the contractual
relationship between employers and unions was almost unknown a
few years ago. Although a number of companies had provided
within-plant medical service to their employees for many years and a
few had established group health-insurance programs, these were
administered by the employer and were subject to alteration or dis­
continuance at his will. Many were started as a part of a general
welfare program designed to win employee loyalty and discourage
union organization. Organized labor, having no voice in their
administration and suspecting the motives for which they were estab­
lished, has never wholeheartedly endorsed company benefit plans.
In response to their members’ need for protection against total loss
of income during sickness, a number of unions have established benefit
programs of their own which are financed through membership dues
or special assessments.1 Many of these, however, cover permanent
disability and old age rather than short periods of illness.
During recent years an increasing number of unions have succeeded
in having health-benefit plans included in the terms of their agreements
with employers, and several international unions have established
special facilities for helping their locals negotiate such plans. Al­
though a number of the provisions in current agreements signify the
substitution of contractual arrangements for already established
employer-administered or union-administered benefit plans,2 many of
them are new; some of the latter have been negotiated in lieu of wage
increases which could not be obtained under the wartime wage
stabilization program.
To strengthen their case for employee participation in administra­
tion, some unions favor the policy of having employees contribute
toward the payment of premiums. On the other hand, some unions
have obtained virtual control of administration of programs which
are financed entirely by employers. In a majority of cases the healthbenefit programs are underwritten by private insurance companies;
such group policies usually include, in addition to the sick-benefit pro­
visions, accidental-death and dismemberment benefits, which are not
described in this report.
1 Some of these were described in Bureau of Labor Statistics Bulletin N o. 465: Beneficial Activities of
American Trade-Unions.
2 Recently an employer proceeded to install a group-insurance program after rejecting the union’s request
to include such a plan in tne union agreement. The union objected, and the case was appealed to an arbi­
trator, who upheld the union’s position; thereupon the company agreed to cancel the policy. Another
local of the same union is pressing charges of unfair labor practices against a com pany which is trying to
establish an insurance plan outside the union contract.


General Characteristics o f H ealth-Benefit Programs

The health-benefit plans described in the following pages cover
more than 600,000 workers employed under agreements negotiated
by unions in various industries. This coverage figure, however, is
not all-inclusive, being based on agreements and other material on
file in the Bureau of Labor Statistics. No attempt has been made to
determine statistically the extent of such provisions in union agree­
ments. The purpose of this report is, rather, to present a brief
description of some of the more representative types of health-benefit
plans established recently by employer-union contracts.
Most of the plans described in this report have been negotiated by
the following unions: International Ladies’ Garment Workers’
Union (A. F. of L.), Amalgamated Clothing Workers of America
(C. I. O.), United Hatters, Cap, and Millinery Workers International
Union (A. F. of L.), Textile Workers Union of America (C. I. O.),
United Textile Workers of America (A. F. of L.), International Fur
and Leather Workers Union of America (C. I. O.), United Electrical,
Radio, and Machine Workers of America (C. I. O.), Upholsterers
International Union of North America (A. F. of L.), United Furniture
Workers of America (C. I. O.), Industrial Union of Marine and Ship­
building Workers of America (C. I. O.), Hotel and Restaurant Em­
ployees’ International Alliance and Bartenders’ International League
of America (A. F. of L.), Paper Workers Organizing Committee
(C. I. O.), United Retail, Wholesale and Department Store Em­
ployees of America (C. I. O.), and the Amalgamated Association of
Street, Electric Railway, and Motor Coach Employees of America
(A. F. of L.). The Trade Union Agency, a New York consultant
firm, acts as representative for several of these unions in their healthinsurance negotiations.

Health-benefit programs provided by collective-bargaining agree­
ments may be divided into three types, according to their method of
administration: (1) Those administered solely by the union, (2) those
administered jointly by the union and employer, and (3) those ad­
ministered by a private insurance company which undertakes the
responsibility for determining eligibility claims and payment of
benefits. Under the third type of plan, the employer may pay
the premium directly to the insurance company, or he may make
payment to a special union fund from which premium payments are
made to an insurance company. Even when the plan is underwritten
by a private insurance company, the union and employer frequently
share in the responsibility of administration. For example, a joint
committee of union and company representatives may review all
claims and, when necessary, jointly sign drafts on the insurance
company. Under some insurance-company plans all claims are filed
through the union.
A little more than a third of the employees covered by health-benefit
programs included in this report are under plans which are jointly
administered by the union and employer. Another third are covered
by programs for which insurance companies assume the major admin­
istrative responsibility; and somewhat less than a third are under
those administered solely by the union.


Most of the health-benefit plans included in this report are financed
entirely by the employer. This is true of all the union-administered
plans, almost all the jointly administered programs, and more than
half of those administered by insurance companies. Only a few of
the jointly administered plans and less than half of those adminis­
tered by the insurance company require both employees and the
employer to contribute to the financing of the health program.
Most agreements stipulate that the employer shall contribute a
specified percentage of his pay roll (usually 2 or 3 percent) to meet
his obligations under the benefit plan, although in some cases no
exact amount is specified.3 Under the latter arrangement the em­
ployer either defrays all the expenses on a current basis, or supple­
ments regular employee contributions with such money as may be
required from time to time.

In the main, health-benefit plans provided under union agreements
include weekly cash benefits during periods of illness and of disability
caused by nonoccupational accidents, hospital and surgical expenses,
and, in some cases, payment of doctor bills. As might be expected,
benefits tend to be higher under plans negotiated in industries having
relatively high wage scales. Dental care and medical preventive
work, such as periodic examinations, are not commonly provided
under these plans, although many large companies maintain these
types of service.
An important exception among benefit programs established under
collective bargaining is found in the programs conducted by the
International Ladies, Garment Workers Union, which include medi­
cal services and preventive medical work, such as X-ray examinations,
in addition to weekly cash-benefit payments. This work is carried
on through the union's health centers in New York City, Philadelphia,
and Fall River.
Recently the St. Louis Joint Council of the United Retail, Whole­
sale and Department Store Employees negotiated a health-benefit
plan under which a health institute, designed to offer extensive medi­
cal services to employees and their dependents, will be established.
With the important exception of programs in the men's and women's
clothing industries (see pp. 204 and 207), most of the plans include
weekly disability benefits ranging from about 50 to 60 percent of an
employee's regular earnings, or, where fixed benefits are stipulated,
from $10.50 to $20 per week. The maximum time allowed for re­
ceiving benefits usually ranges fron 13 to 26 weeks (6 weeks in case
of pregnancy) for any one continuous disability, although several
plans allow continuous coverage for 52 weeks. Under almost all
the plans the payment of benefits commences on the eighth day of
disability in case of illness, and on the first day in accident cases.
Payments for hospital services ranging from $4 to $5 per day for
31 days, are usually allowed for any one continuous disability, but
are limited to 12 or 14 days in maternity cases or cases involving any*
* The cost of the life insurance or accidental-death and dismemberment benefits, where provided, absorbs
a substantial share of the employer’s contribution, but, as indicated previously, these features are not
discussed in this report.

condition resulting from pregnancy. Frequently an additional $25
is allowed for special hospital expenses. Payment for medical serv­
ice is not commonly provided, although a few plans allow specified
payments for doctors7 services up to a maximum of 50 visits for any
one disability, which usually begins with the first treatment in case
of accident, and the fourth in case of illness. Maximum surgical
benefits under most of the plans range from $100 to $175, and these
plans frequently furnish a schedule of surgical allowances for differ­
ent types of operations. Hospitalization coverage for dependents is
provided in some plans, but it sometimes entails additional contribu­
tions by the employee.
Many of the programs do not provide a fixed daily hospital payment,
but instead provide a service benefit through the Blue Cross Associ­
ated Hospital Service. This service generally furnishes semiprivate
hospital accommodations, plus unlimited use of operating rooms,
X-ray, anesthetics, special medications such as penicillin, etc., for
21 days in any year; thereafter half of the regular hospital expenses are
paid for an additional 180 days. Usual maternity hospital benefits
under the Blue Cross plan are $6 per day for 10 days, but in specified
types of cases the regular hospitalization benefits are paid.

Disability caused by occupational accidents which are covered bv
workmen’s compensation are excluded from coverage in virtually all
of the health-benefit plans.
Almost none of the health-benefit programs provided through
collective bargaining require the medical examination of covered em­
ployees, although pre-employment medical examinations may be in
operation in some of the plants. Except that disability payments
are frequently limited to 13 weeks for any single disability for persons
over 60 years of age, there are no age limitations.
Under the Blue Cross plan, no hospital benefits are allowed for
communicable diseases, pulmonary tuberculosis, and mental or
nervous disorders; also, in most cases the Blue Cross plan does not
cover maternity or preexisting physical conditions during the first
11 months after enrollment, although in some areas this provision
can be waived where a specified number (50 or 75 percent) of those
eligible participate in the plan.
Temporary employees usually are not covered; the group healthinsurance plans underwritten by private insurance companies ordi­
narily provide that new employees participate after having been con­
tinuously employed for a definite period of time, ranging from 1 to 6
months. Union membership in good standing is generally required
in all plans administered by the union alone or jointly with the em­
ployer, whereas membership is not required in most insurance-com­
pany programs, unless the agreement empowers the union itself to
contract with an insurance company.
The question of how long an employee should be covered during
periods of temporary lay-off, seasonal slack periods, and leaves of
absence is usually the subject of considerable negotiation in establish­
ing a benefit plan. Although it is during such periods that need for
protection is often greatest, employers and insurance companies fre­
quently oppose the covering of any employees who are not on the

active pay roll. Very few of the health-benefit plans established under
collective bargaining specifically include the length of time during
which coverage continues after lay-off, but there is increasing recog­
nition of this problem. Some unions contend that as long as thelaidoff employee has a “ reasonable expectancy” of returning to the job,
he should be protected by the benefit program. The majority of
plans underwritten by private insurance companies simply state
that the insurance continues in force until the end of the policy month
in which the lay-off commences, provided the premiums are paid
during this time. Some insurance-company plans provide that, in
event of temporary lay-off or leave of absence, health and hospital
benefits continue for 1 or 2 months. Under one jointly administered
plan, group accident and health insurance continues for 4 months
•after lay-off.
Under union-administered plans, protection of laid-off employees
is, to a considerable extent, a problem for the union alone to decide.
In practice, employees usually are eligible for benefits during slack
seasons and lay-offs if they maintain their union membership. One
union-administered plan provides that “ unemployed members behind
in dues payments may be declared eligible by the benefit fund com­

The privilege of conversion to individual insurance policies upon
termination of employment or upon transfer to another job (either
in the same or another industry) is of considerable importance to
the individual worker. The industry-wide programs, such as exist
in various branches of the furniture, fur, textile, and women’s
apparel industries as well as in the New York hotel plan, permit
transfer of coverage from plant to plant, sometimes with a proba­
tionary requirement with the new employer, during which time the
original employer continues the payment of premiums. Some grouphospitalization plans, such as the Blue Cross, may be transferred
upon termination of employment to an individual plan, with a slight
increase in cost.

Union-administered or joint plans, not underwritten by an outside
insurance company, usually provide for the conversion of surplus
funds into increased benefits; some of those jointly financed specify
that contributions required from participating employees be de­
creased. A few of the group-insurance plans which are jointly financed
include provisions for the sharing of dividends. Several such plans
in operation in some of the large shipyards provide that any declared
dividends shall be payable to the company, and that the employees’
proportionate shares shall be used for the workers as a group, to reduce
or waive contributions.
Several of the jointly administered and jointly financed benefit
programs provide for the distribution of remaining funds in the event
of termination of the program. Generally, any money on hand is to
be distributed to the general funds of the local union and the company,
in proportion to their respective contributions. One jointly ad­
ministered, employer-financed plan states: “ If the parties hereto
664147°—45----- 2

fail to renew this agreement at the expiration date, the board of
trustees created herem shall continue to function ana carry out the
purposes of said fund until all monies will be exhausted.”

Under some plans, particularly those administered by insurance
companies, benefits would be automatically discontinued if the em­
ployer failed to pay the necessary monthly premiums. To insure
continued coverage, one agreement covering a group of employers
provides a series of penalties against employers who default in the
payment of premiums; if, after notice, the employer fails to correct
such default, the union may demand a bond equivalent to onefourth of the annual premiums; and, furthermore, any employer who
fails to provide proper insurance coverage for an employee is personally
liable for the same benefits the worker would have received from the
insurance company. The agreement further provides that the union
may call a strike on 5 days' notice if the employer fails to live up to
his health-insurance obligations.
Another agreement negotiated with an employers' association
states that in the event any employer fails to meet his financial
obligations under the health-benefit plan, the union may take “ ap­
propriate action to enforce such payment,” notwithstanding the
no-strike clause in the agreement. This same agreement also author­
izes the union to examine the employer's records and papers, in order
to ascertain whether he is complying with the provisions of the
health plan. Another agreement with an employers' association
states that failure to make proper remittances to the union's health
fund “ shall be deemed a violation of this agreement, for which a
member of the association shall forfeit all rights and privileges here­
In anticipation of Government-sponsored health-insurance legis­
lation which might involve duplication of costs to employers, some
agreements include “ escape clauses.” For example, one agreement
provides that if either the State or the Federal Government enacts
health legislation whose benefits parallel any of those established
by the collective-bargaining agreement, the latter become “ inop­
erative and canceled in the policy,” and the employer is “ relieved
of the cost thereof, in order to avoid duplication of costs.”
Plans Adm inistered b y Insurance Companies

About a third of the employees covered by health-benefit programs
included in this report are employed under plans underwritten and
administered by insurance companies. Such arrangements occur
most frequently in the textile, street-and-electric-railway, ship­
building, furniture, and electrical-machinery agreements. Some are
also in effect in the rubber, paper, public-utilities, fur and leather­
tanning industries, nonferrous-metal mining, retail trade, and hotel
and restaurant agreements.
Once the benefits and coverage have been determined through col­
lective bargaining, the employer is free under some agreements to
contract for such insurance coverage with any company he chooses.
Other agreements specify that he pay his contribution directly to the

union, which in turn contracts for the insurance. Under some plans
the union and employer jointly select the insurance company.
Financing.— Most of the workers covered by programs included in
this report which are administered by the insurance company are not
required to pay any of the costs. Employer-financed plans are pro­
vided in all the agreements studied in the rubber; upholstery, and
leather-tanning industries and in most of the textile and electricalmachinery agreements. Provisions for sharing of costs by employer
and employees are prevalent in the shipbuilding, street-and-electricrailway, and utilities agreements.
The size of the premiums under the systems financed exclusively
by the employer ranges from 1 to 5 percent of the weekly pay roll,
although some agreements merely state that the employer agrees to
bear all costs of the plan, without giving any indication of the amount.
In plans the cost of which is borne jointly, the employer's share is
usually from 50 to 70 percent of the total premiums. In most in­
stances the employee's share of the premium ranges from 30 to 50
cents weekly, but if benefits are graduated according to earnings,
employees who are entitled to weekly disability allowances of $35
or $40 contribute as much as $1.57 per week.
Administration.— Although the insurance company establishes the
rules and regulations and finally passes on the eligibility of claims,
it is quite common for unions to have a voice in the day-to-day
administration of health-benefit programs underwritten by insurance
companies. This is especially true in the filing of claims, adjustment
of complaints, and elimination of possible misunderstandings among
employees concerning benefit payments, coverage, and eligibility.
Agreements in the shipbuilding and electrical-machinery industries
frequently stipulate that the union is to have an equal voice with the
management in the administration of the insurance programs as well
as in the installation of new benefits. The American Federation of
Hosiery Workers has appointed shop committees in those companies
with which it has negotiated health-insurance programs, to adjust
individual complaints and grievances, prevent malingering, and see
that the employer is paying the necessary premiums to the insurance
company. In some industries the union locals have established special
insurance departments to assist members in filing claims. In some
companies the personnel office is authorized to draw drafts for the
payment of benefits; in other cases, employees file claims directly
with an insurance adjuster's office.
Upon proper evidence, usually in the form of a doctor's certificate,
the insurance company authorizes the employer, or the employer and
the union jointly, to issue drafts to employees to cover the benefits
provided by the policy. In cases in which the Blue Cross hospitali­
zation plan is in effect, an official card is presented to the hospital at
the time of admission, and the Blue Cross pays the hospital directly.
If the employee is allowed a fixed daily benefit, he pays the hospital
bill himself and is later reimbursed by insurance company or union.


I . O .)

According to statements made by the Textile Workers Union of
America (C. I. O.), agreements including health-insurance plans have
been negotiated for more than 100,000 members in the various

branches of the textile industry. The agreements specify the benefits
which are to be provided, provisions for coverage during periods of
lay-off, eligibility requirements, and methods of enforcement. With
certain exceptions (including the plan of the American Federation
of Hosiery Workers, see p. 199), the employer is free to select the
insurance company as long as the benefits provided in the policies
adhere to the agreement provisions; the union reserves the right to
reject the policy if it does not correspond to the general plan for the
industry. Generally all claims are handled by the employer, who
transmits them to the insurance company.
Practically all the T. W. U. A. plans are employer-financed. With
slight variation in the benefits afforded, the insurance covers death,
sickness, and nonoccupational accidents, besides providing allowances
for surgical aid, hospitalization, and maternity care; under a few
agreements hospitalization coverage is extended to workers' de­
pendents. This union also has negotiated a few plans, jointly
financed and administered, in the rayon-manufacturing industry, but
benefits under these plans are limited to payments for sickness and
nonoccupational accidents, with no provision for hospitalization.
Under the T. W. U. A. plans, a worker usually must be employed
in the industry for 6 months before he is eligible for coverage, and
coverage is retained by employees transferring to other plants in the
same industry where the insurance program is in effect. An em­
ployee on temporary leave of absence is covered for 3 months after
such leave commences. Should he obtain a job elsewhere in the
industry, however, he must wait 3 weeks before he is eligible for in­
surance protection.
Most of the plans provide for the following benefits:
Hospitalization allowance, usually $5 per day, for a maximum of 31 days for
any one illness (maternity cases 12 or 14 days). A few of the plans also provide
hospitalization benefits of $4 per day for dependents of the insured worker.
Extra hospital expenses up to $25 for employees ($20 for dependents, where covered)
and surgical aid up to $150, depending on the type of operation performed.
Weekly benefits for sickness and nonoccupational accidents ranging from
$10.50 to $17.00, up to 13 weeks (maternity benefits for a maximum of 6 weeks),
following a 7-day waiting period in cases of sickness, but none for accident cases.
Federation o f D yers , Finishers , P rin ters, and Bleachers o f A m erica (C. I . O .)

This division of the T. W. U. A. has negotiated individual agree­
ments, incorporating a uniform health-benefit plan, with companies
employing a total of about 20,000 workers in the textile dyeing, finish­
ing, and printing industry. The plan is on an employer-pay-all basis,
and management is free to select the insurance company under which
it is to be covered, as long as the benefit schedule stipulated in the
collective-bargaining agreement is followed. Benefits are paid
through the employer's office, but the management is required to
furnish a monthly report, on a form provided by the union, to the
union office. This report details the benefits paid, expenses, etc.,
and enables the union to evaluate the plan from time to time.
New employees are “ required to pass a probationary period of 6
months" before they are eligible to participate in the program.
Workers transferring from one insured shop in the industry to another
are covered after a 3-week probation with the new employer. Any
worker on a temporary leave of absence is covered for hospitalization
and surgical insurance for 3 months, and for sickness and accident

insurance for 2 months. Hospitalization benefits are furnished to
dependents, without charge to the worker.
The plan provides the following benefits:
Weekly disability benefits (commencing on the eighth day in case of illness
and the first day for accidents) of $17 for 13 weeks for any one period of dis­
ability. (Employees 60 years of age and over are limited to a total of 13 weeks
in any consecutive 12-month period.)
Hospital benefits of $5 per day, for 31 days for any one period of disability.
An additional $25 is allowed for extra hospital charges such as X-rays, anesthetics,
laboratory, and operating and delivery-room charges. Maximum surgical
reimbursement is $150. In the event the policy is terminated, employees are
eligible for hospitalization and surgical benefits for a period of 3 additional months
in connection with a continuous disability sustained while the policy was still in
In maternity or any other case due to pregnancy the weekly benefit period for
the worker is limited to 6 weeks, and the hospitalization allowance is limited to
14 days. The plan provides for the payment of maternity hospital benefits for a
period of 9 months after the termination of the policy.
Hospitalization expenses for dependents (defined as a wife, but not a husband,
and unmarried children between 3 months and 18 years old) are reimbursed to a
maximum of $4 per day for 31 days. An allowance of $20 is made for special
hospital expenses. Dependents’ maternity hospital benefits are $4 per day for 10
days. If the policy is terminated, hospitalization coverage for dependents is
extended as in the case of the worker.
Am erican Federation o f H osiery W orkers

The health-insurance program of this branch of the T. W. U. A.,
covering an estimated 22,000 workers, differs somewhat from the other
plans in the textile industry. For example, the agreement entered
into by this union and the American Federation of Full-Fashioned
Hosiery Manufacturers of America, Inc., states that “ in no event
shall the employer’s premium liability exceed 2 percent of each
weekly pay roll, and if the policy requires a greater premium, the
difference will be paid by the employee members of the union.”
Details of the hosiery-industry insurance plan, including the
selection of the insurance company, the nature and type of insurance,
coverage^ and related matters, were worked out by a joint committee
appointed by the manufacturers’ association and the union, and
policies are issued in the joint names of the manufacturers’ association
and the union. Although the premiums are paid directly to the in­
surance company by the employer, adjustments are processed, not
through the employer’s office, but through an insurance adjuster’s
office authorized by the insurance company to handle claims and
extend such services as may be required. Although the insurance
company has final responsibility for administration of the plan, in­
surance shop committees, composed of workers appointed within the
local unions, check on the progress of the plan within their own shops
and adjust complaints regarding the payment of claims. The
union’s insurance committee also investigates cases of malingering.
The group policy establishes the following benefits:
Weekly sick and accident benefits equal to 60 percent of the employee’s average
wages, up to a maximum of 52 weeks, after a 7-day waiting period for sickness but
none for accidents. Benefits for disabilities or operations caused by diseases of
the female generative organs are provided only if the employee has been con­
tinuously insured for 6 months previous to such disability.
Payment of doctor bills of $3 per visit if such service is rendered at home, $2
if at office, up to 50 visits for any one disability, but limited to 3 in any 1 week.
Payments begin with the first treatment in accident cases, the fourth in sickness

Hospital expenses up to $5 a day, for a period not exceeding 50 days, and sur­
gical benefits ranging from $5 to $175, depending upon the nature of the operation.
Maternity benefits up to 6 weeks, at 60 percent of the average weekly salary,
with hospital expenses up to 12 days, provided the employee has been continu­
ously insured for a minimum of 9 months.



1 O .)

Group health-insurance programs are being negotiated by the U. E.
R. M. W. A. in increasing numbers in various branches of the in­
dustry,4 and at present, according to the union, they cover about
75,000 employees. The majority of them call for the assumption of
the entire cost by the employer, although joint union-management
reviews of employees’ claims are frequently provided. Booklets an­
nouncing the plan, as well as the insurance policies, contain the name
of the union and the employer. In some instances, special arrange­
ments have been made to extend the group-health benefits for a
maximum of 30 to 60 days during periods of lay-off. Plans of the
U. E. R. M. W. A. generally make provision for the conversion of
some of the benefits, like hospitalization, to an individual basis if the
employee should leave the shop where he is insured. In those in­
stances in which the employer and the employees share in the cost, the
agreements stipulate that there shall be a division of dividends, in
proportion to the amount of the premium each pays.
Payments for any one period of disabilitv are usually limited to 13
weeks, but in a few cases they are extended to 26 weeks. Weekly
disability benefits for maternity are included in all agreements, but
are limited to 6 weeks. The amount of sickness and accident benefits
under most of these plans depends upon the employee’s regular (40hour week) earnings. For example, two typical plans in effect in
two electrical-machinery plants include the following schedules of
sickness and accident benefits, payable for 13 weeks:
P lan t A


P lant B

Weekly earnings:
benefit Weekly earnings:
Under $25___________________$10
Under $30__________
$25 and under $35_____
$30 to $45___________________ 20
$35 and under $50___________
$45 to $55...........
$55 and over...... ........................ 35
$50 and under $65___________
$65 and under $75___________
$75 and over_________________ 40

Under most of the plans surgical reimbursement is allowed up to
$150. Nearly all of the plans provide hospitalization benefits under­
written by the Blue Cross but several establish a flat hospitalization
benefit, usually $5 per day. Some of the union’s plans extend hos­
pitalization benefits to the insured employee’s dependents, but these
plans generally require the employee to contribute, in addition to the
premiums paid by the employer. While doctors’ bills are usually not
included among the benefits, one agreement provides for reimburse­
ment for medical service beginning with the doctor’s second visit at
'lome, in the hospital, or at his office.

Group-insurance programs of the I. F. L. W. U. are now in effect
in a number of cities, but most of the employees covered are in New*
* The international office has issued a bulletin of instructions (UE Guide to Group Insurance) which
has been of great assistance to its locals.

York and New Jersey. According to the union, I. F. L. W. U.
agreements covering approximately 15,000 employees include healthbenefit programs.
Most of the plans are employer-financed, through 2- or 3-percent
pay-roll contributions. This money is turned over to the local union,
wmch in turn contracts with a private insurance company—in most
cases, with the Blue Cross.
The plans in various locals of the union vary, depending upon the
amount of employer contribution in each instance. A typical plan
establishes a range in benefits from $16.50 to $25, depending upon the
employee's regular earnings, for 13 weeks for any one period of
disability, with maternity benefits limited to 6 weeks. This plan also
provides daily hospital benefits of $5, payable for 31 days for each
period of disability, and a maximum allowance of $25 for miscellaneous
hospital expenses. Surgical reimbursement up to $150 is provided.
The agreement with the New York Joint Board of Fur Dressers and
Dyers, covering about 4,000 workers, has a similar plan, except that
hospital benefits are provided through the Blue Cross.

The Upholsterers International Union has negotiated health-insur­
ance plans for more than 8,000 workers in a number of the larger
cities in the country. The employers finance these programs by con­
tributing 2 percent of their gross pay roll to the international union
which, in turn, purchases policies from an insurance company.
Claims are processed through the union.
Benefits are as follows:
Weekly allowances, amounting to 60 percent of the employee's average weekly
wage, for as long as the disability continues up to 52 weeks, with payment begin­
ning on the eighth day in case of illness and on the first day for accidents; hospital
expenses up to $4 a day for a period not exceeding 50 days; doctor bills up to
$3 per visit at home and $2 at the doctor's office, to a total of 50 visits for any
disability, but limited to 3 visits per week, with payments beginning for the
first treatment in case of accident, and the fourth in case of illness; surgical
allowance up to $175. In case of maternity, weekly disability payments are
limited to 6 weeks, and hospital benefits are allowed only for 12 days.

The United Textile Workers of America, through its woolen and
worsted department, has negotiated several health-insurance plans
covering workers in the New England area. The cost of these plans
is borne in shares of two-thirds for the employer and one-third for the
workers,6 with the workers sharing in the dividends in the same ratio.
The plan provides benefits of $14 per week for a maximum of 13
weeks for any one continuous disability resulting from nonoccupational accident or illness, hospitalization at $4 per day for 31 days (14
days in maternity cases), surgical expenses up to $100, and $20 for
special hospital expenses.
This union also has negotiated health-insurance plans in other
branches of the textile industry in the New England and Middle
Atlantic area which are financed entirely by the employer. Surgical
« The union “ insisted on contributing toward the premium in this health program * * * thereby
making it part of their union contract and giving the union voice in the application of same. ” Officers
Report to the Eighth Biennial Convention of United Textile Workers of America (1944).

and hospital benefits are similar to those furnished to the woolen and
worsted workers, but weekly disability benefits are only $10. How­
ever, allowance is made for physicians’ calls at the rate of $3 for each
house or hospital call and $2 for each office visit, with a maximum of
3 calls per week and 30 calls for each separate disability period.
U N IT E D F U R N IT U R E W O R K E R S OF A M ER IC A (C. I. O .)

Several thousand workers are covered by a uniform health-insurance
plan negotiated by the United Furniture Workers of America. To
date, it covers employees in the New York and New Jersey area only;
however, the union is seeking to extend the program to other sections
of the country, and also expects to obtain coverage for nonunion
employees when the plans are extended to shops which are not
covered by'closed- or union-shop contracts.
The plan is financed entirely by the employers, who pay 3 percent
of their weekly pay rolls into the union’s insurance trust fund, which
is governed bv five trustees—all members of the union’s national
executive board. The union contracts with a private company for
the weekly accident and sickness benefits, surgical benefits, dis­
memberment benefits, and life insurance, and with the Blue Cross
for the hospitalization benefits. All claims are submitted through
the local union offices.
Weekly benefits for nonoccupational illnesses range from $10 to
$27.50 per week, based on the employee’s earnings. The maximum
for any one period of disability is 13 weeks, except that disability
benefits during maternity leave are limited to 6 weeks. Surgical
reimbursement is limited to $150. When the program was initially
instituted by the union on October 1, 1944, it provided hospitalization
benefits under the Blue Cross plan only for employees, but recently
the union extended the plan to provide hospitalization benefits for
the employees’ families as well. The costs of the family-hospitaliza­
tion coverage, as well as all the other benefits of the program, are
being paid for by the employers’ contributions.
( a . F . OF L .)

A substantial number of agreements negotiated by this union con­
tain group-insurance plans. Most of these are underwritten and
administered by private insurance companies and financed jointly
by the employer and employees, but several are financed entirely
by the employers.
Flat weekly benefits are provided in the various plans, ranging from
$10 to $30, generally for a maximum of 13 weeks for each different
period of disability, although some provide payments up to 26 weeks.
Hospitalization allowances are usually $4 or $4.50 daily, for 30 to 90
days. In some plans an additional sum, usually about $20, is allowed
for special hospital expenses. Several plans provide hospitalization
protection for the employee’s dependents, although not of the same
amounts nor generally for so long a period as for the employee. In
plans which include surgical benefits, the maximum allowance is
commonly $150.


Health-insurance plans are included in some of the agreements
negotiated by the Marine and Shipbuilding Workers. Most of them
are jointly financed, with employees paying half of the cost. The
majority of the plans adjust weekly benefits to the employee’s regular
straight-time weekly earnings, and under this arrangement benefits
may vary from $10 to $40. Several, however, particularly those
negotiated during the past year, establish a flat weekly sickness and
accident benefit for all employees. One agreement, for example,
provides a flat weekly disability benefit of $21.
Benefits for nonoccupational accidents generally commence with
the first day of disability; sickness payments start on the eighth day
under some plans and on the fourth day in others. Daily hospital
benefits are usually $5 (a few plans allow $6) for a maximum of 31
days (70 days in one plan) for any one continuous disability. Most
of the plans allow an additional $25 or $30 for any special hospital
charges, such as X-ray, anesthetic, delivery room, etc. According
to a few plans, if an employee’s insurance ceases for any reason, his
hospitalization coverage continues for 3 months. Maximum surgical
benefits are $150.

The Hotel and Restaurant Alliance has not adopted a uniform
policy of obtaining health benefits in its collective-bargaining agree­
ments, but a few of the important sections of this union have secured
such benefits for their members. One of the most recently negotiated
plans is that with the Hotel Association of New York by the New York
Hotel Trades Council (A. F. of L.), of which the New York locals of
the Hotel and Restaurant Employees’ Alliance are members. This
program, which covers about 25,000 workers in 134 unionized hotels
and is financed entirely by the employers, was made part of the
city-wide hotel agreement, following the unanimous award of an
impartial three-man commission appointed to study the problem.
During the first 6 months of the plan’s operation employers were
required to contribute 6 percent of their weekly pay roll; at the end
of that period this was reduced to 3 percent. The contributions are
made to an insurance fund, which is administered by a board of
trustees composed of the executive board members of the Trades
Council, with an advisory committee consisting of the board of
overnors of the Hotel Association. Benefit payments began on
larch 1, 1945, after contracts were signed with a regular insurance
company to furnish disability benefits, and with the Blue Cross to
provide hospitalization.
Hospitalization benefits are provided for employees and their
dependents, in accordance with the Blue Cross plan. All benefit
checks are signed by a representative of the trustees.
To be eligible for the insurance benefits, the employee must be a
member of the union for 6 months and an employee of union-contract
hotels for 4 months. However, returning veterans who are honorably
discharged are insured immediately without a waiting period. Weekly
sickness benefits under the plan are $10 per week for female members
and $12 per week for male members, with a maximum of 26 weeks’


benefits for any one period of disability, except that benefits for
maternity cases are limited to 6 weeks, and those for members over
60 years of age to 26 weeks in any one year.


I . O .)

A number of agreements negotiated by the Paper Workers Organ­
izing Committee establish employer-financed health-insurance plans.
These plans commonly provide daily hospital benefits of $5 for 31
days, up to $150 for surgical expenses, and $25 for additional hospital
fees. Weekly disability benefits, commencing on the first day in
case of accidents and on the eighth day in case of sickness, vary
according to the w ork ed earnings as follows:
Weekly earnings:
Weekly benefit
Under $22.50______________________ $10
$22.50 to $29.99__________________
$30.00 to $39.99__________________
$40.00 and over__________________

Union-Adm inistered Benefit Plans

Of the health-benefit plans described in this report, those covering
somewhat less than a third of the workers require that the union
assume all, or the major share, of the responsibility for administering
the program.6 Plans of this type are found principally in the women’s
apparel industry, although more than 20,000 laundry workers in
New York City and a few fur and millinery shops are also covered
by union-administered benefit provisions.
These union-administered plans are financed entirely by the em­
ployer or a group of employers who agree to pay a stipulated amount,
usually a percentage of the weekly pay roll, to a benefit fund estab­
lished within the union. Rules and conditions under which benefits
are to be paid are adopted by the union, although usually subject to
the approval of the employers. In several agreements the employer
and union jointly determine the amount of benefits and the rules and
regulations which are ultimately to be administered by the union.
According to the New York laundry workers’ agreement, the employers’
association is permitted to examine the books of the insurance fund,
and some of the ladies’ garment workers’ health plans require the
union to submit periodic financial reports to contributing employers.
Others, however, specify that “ neither the association nor any of its
employers shall have any right, title, or interest in and to said fund
or the administration thereof.”

The benefit programs currently in effect for members of the Inter­
national Ladies’ Garment Workers’ Union are an outgrowth of the
union’s welfare and health programs formerly financed entirely by the
members. They now cover, according to the union, about 150,000
employees in the women’s apparel industry. With few exceptions,
they are financed entirely by employer contributions. These plans
s All plans which are administered through insurance companies are covered in the preceding section,
including those in which the employers’ contributions are turned over to the unions which, in turn, take
out group policies with private insurance companies.

include vacation payments in addition to sick-benefit payments and
medical services; some also include retirement provisions, but none
provide death benefits. The employer usually contributes from 3 to
4 percent of his gross pay roll, but only part (from a third to a half) of
this amount is allocated for health benefits, the rest being used to
finance the vacation and retirement provisions (not discussed here).
Failure to pay the required contributions to the benefit fund, or
falsification of forms, or failure to file necessary forms is considered a
violation of the collective bargaining contract.
Employers’ contributions are turned over to the appropriate joint
boards of the union which are responsible for the administration of the
programs. According to several of the more important plans, the
amount of benefit, as well as the rules and regulations under which
claims are paid, is determined by a committee of employer and union
representatives. In other instances the determination of benefits and
other rules is entirely in the hands of the union. Under all the pro­
grams the actual payment of claims, as well as appeals from decisions
of the benefit committee, is handled through the union’s office.
Union health centers.— The I. L. G. W. U. programs stress medical
care, and the union has established health centers in most of the im­
portant clothing areas. The health center in New York City has been
in operation since 1912, the one in Philadelphia was established in
1943, and that in Fall River was opened in 1944. Until 1943, the
New York center was financed by local union contributions, any
deficits being met by the international. Since then, a large part of this
center’s financial support has been derived from funds paid to the
union under health-insurance programs included in union agreements.
The health center’s services have been expanded considerably during
the past year, and it now acts as an agency for the certification of
benefit claims, its physicians making recommendations approving or
disapproving cash-benefit payments under the insurance program.
The Philadelphia health center is an outgrowth of a collective-bargain­
ing agreement between the union and the women’s apparel manu­
facturers’ association which also established health benefits. The
Fall River center, also established under the terms of a collective
agreement, provides medical services to some 4,000 members in that
city and the surrounding New England area, including Providence,
New Bedford, West Warwick, Pawtucket, Warren, and Taunton.
Each member of the I. L. G. W. U. living or working in the vicinity
of New York, Philadelphia, or Fall River is entitled to free annual
medical examinations, as well as free X-ray, electrocardiographs, and
other medical services furnished at the centers. Members in the
New York dress industry also receive free optical examinations every
3 years, under a recently negotiated plan, and treatment or glasses,
when necessary, furnished without cost, at the union’s health center.
Health benefits provided.— To be eligible for benefits, the worker
usually must have been a member of the union in good standing for
at least 6 months (in some cases 9 months), with not more than 4
weeks’ dues unpaid.
Although some of the agreements recently negotiated do not contain
detailed provisions as to the amount of benefits, the usual allowances
range from $6 to $15 weekly, for from 10 to 13 weeks in any year,
with payments beginning on the eighth day of illness. Hospitaliza­
tion benefits are $2 to $5 a day for 21 days, with some plans limiting

hospitalization benefits to 12 days. Neither weekly disability nor
hospital benefits are paid in pregnancy cases, but one plan provides a
$25 cash benefit for postnatal care. In tubercular cases, the workers
are given the choice of a cash benefit payment of $200 to $250, or
treatment in a sanitorium for the entire period of illness.
N E W Y O R K C IT Y LA U N D RY W O R K E RS (C . I . O .)

The New York City Laundry Workers Division of the Amalga­
mated Clothing Workers of America and three laundry employers’
associations have negotiated a benefit plan which is financed by
employers, who contribute 1 percent of their weekly pay rolls. These
funds are administered by a seven-man union board, known as the
“ benefit fund committee,” and sickness, nonoccupational accident,
and death benefits are provided. A benefit fund and claims office,
patterned after a regular insurance company office, has been estab­
lished by the union to take charge of the day-to-day administration
of the program; but appeals from decisions of the claims office may be
made to the benefit fund committee.
Weekly sickness and accident benefits of $8 per week are payable
after the first week of disability, up to a maximum of 12 weeks in any
year. In addition to the cash payments, visiting nurses are sent to
members’ homes when necessary, but hospitalization benefits are not
provided. Unemployed members are eligible for benefits upon
special arrangements with the benefit fund committee.
U N ITED H A TTER S, C A P, A N D M ILL IN E R Y W O R K E R S ( a . F . OF L .)

Cap and men’s hat locals of the United Hatters, Cap and Millinery
Workers in several cities, including New York, Chicago, St. Louis,
and Philadelphia, have recently negotiated union-administered health
benefit agreements. The employers contribute 2 percent of their
weekly pay roll to the local’s health benefit fund, which is administered
by a board of trustees. In some locals the board is chosen by the
membership only ; in others the employers are also represented.
Under the New York cap makers’ plan, disability benefits amount to
50 percent of the members’ average weekly earnings, up to a maximum
of $30 per week for 20 weeks during any year, with benefits starting
on the first day in accident cases and on the eighth day in sickness
cases. Hospitalization benefits are $4 daily for a maximum of 30
days during any 1 year; surgical benefits are not to exceed $50 for
any operation.
Jointly Adm inistered Plans

There are two principal types of jointly administered health-bene­
fit plans provided in current union agreements— those which are
confined to a single company, and those which are negotiated on an
industry- or area-wide basis. Under the single-company plans in­
cluded in this report, a fund is built up by employees’ dues or pay-roll
deductions, with the employer either matching the employees’ pay­
ment, or, at least paying the costs of administration. A committee
of union and company representatives is usually designated to admin­
ister the program. Unlike group-insurance plans underwritten by

private insurance companies, in which profits, if any, are returned
to policyholders in the form of dividends, the surplus in these plans is
used for increasing benefit payments or for reducing contributions.
Individual-company plans of this type are not very common, although
a few are in effect in the chemical industry.
Jointly administered plans which cover an entire industry or area
are more common and include more than a third of all the workers
under benefit plans included in this report. The largest single group
of employees covered by any benefit program established through
collective bargaining is the group covered by the jointly administered
program negotiated by the Amalgamated Clothing Workers with the
Men’s and Boys’ Clothing Manufacturers’ Association. Plans of
this type also exist in some branches of the women’s apparel industry,
in the millinery industry, and in a recently negotiated agreement
covering retail and wholesale clerks in St. Louis.
Although these benefit programs are jointly controlled, day-to-day
administration is actually in union hands. The employers partici­
pate in establishing the general terms and policies and also exercise
veto power over proposals to modify existing benefit arrangements.
Most of the plans, including all those negotiated by the Amalgamated
Clothing Workers of America, place the entire cost upon the employer.

More than 200,000 workers are covered by the jointly administered
health-insurance programs negotiated by the Amalgamated Clothing
Workers of America (C. I. O.), about 125,000 of whom are employed
by companies under the Men’s and Boys’ Clothing Manufacturers
Association agreement. This latter plan is an outgrowth of negotia­
tions which were initiated by the A. C. W. A. in 1941, at which time
the association and the union agreed to conduct a study of the possi­
bility of establishing a health and insurance fund on a national basis.
In February 1942 the parties agreed on a plan, and a standard form
was drawn up, to be used as a supplement to the individual collective­
bargaining agreements negotiated with all employers belonging to the
association. Contributions to the fund began at that time, but pay­
ment of benefits did not begin until February 1, 1944, by which time
sufficient reserves had been accumulated. This program now oper­
ates in 17 States, covering most of the important organized men’s
clothing markets. An additional 15,000 workers are covered under
a separate but similar insurance program in effect in Chicago.7
The A. C. W. A. national insurance plan is financed entirely by man­
ufacturers and contractors, who contribute 2 percent of their weekly
pay rolls into the Amalgamated Insurance Fund, which is adminis­
tered by a board of trustees composed of 12 members of the executive
board of the union. Before the trustees can “ enter into any insur­
ance contract, or purchase any insurance policy, or make any change
in any outstanding policy * * *” they must obtain the consent of
an advisory committee, composed of 11 members of the association
representing the employers. The resources of the Amalgamated
Insurance Fund are employed to operate the Amalgamated Life
7 In Chicago, in 1940, the clothing manufacturers and contractors and the A . C. W . A . agreed to convert
a previously existing unemployment-benefit fund, made up b y employer’s contributions, into a health and
benefit plan. This benefit plan, the first of its kind in the industry, was instituted after the passage o f the
Federal Social Security A ct had made this private unemployment-insurance program obsolete.

Insurance Co., a capital-stock insurance company chartered under
the laws of New York State, with a board of directors composed of
union and employer representatives. This company issues policies
to eligible members of the A. C. W. A. employed by contributing
employers and pays the benefits.
All workers in the men’s clothing industry (including learners and
clerks, as well as production workers) who have been members in the
A. C. W. A. for at least 6 months, and who have worked for an em­
ployer at least a day in each of 6 different months, of which 1 month
must have been within the last 4 months, are automatically in­
sured. Employees in closely connected branches of the clothing
industry, such as single-pants shop workers, sportswear, and sheep­
lining and leather workers are also covered by the A. C. W . A. insur­
ance program. Employees are covered as long as they are employed
in any shop included in the plan, and for 4 months after lay-off from
the industry, but insurance terminates upon withdrawal, suspension,
or expulsion from the union. If a worker is disabled and eligible for
weekly benefits on the day insurance terminates, the insurance con­
tinues until the end of the period for which benefits are payable.
Weekly benefits for sickness and nonoccupational accidents are $12
for men and $8 for women, for a maximum of 13 weeks in any 12
consecutive months (rather than for any continuous disability).
For accidents resulting in disability of 7 days or more, payment of
benefits begins from the first day of such disability. In the case of
illness resulting in disability for 14 days or more, payment of benefits
begins on the eighth day of disability. Confinement to bed or at
home is unnecessary, but the member must be under a doctor’s care
and unable to work, and must have notified the office not later than
20 days after the first day of his disability. The plan includes hos­
pitalization benefits of $5 per day for 31 days in any one year, and $25
for additional expenses. No regular weekly or hospital benefits are
paid for disability resulting from pregnancy, but a flat $50 maternity
benefit is furnished.

R E T A IL ,







AM ERICA (C. I . O .)

The St. Louis Council of the United Retail, Wholesale and 'Depart­
ment Store Employees of America and a number of employers recently
completed a plan to establish a health institute to be financed by the
employers, who will contribute at the rate of 3 percent of their total
pay roll, for all workers covered by the agreement.
The Labor Health Institute, as it is called, will be administered by
a board of trustees composed of 18 members of the union, 6 employer
representatives, and 3 representatives of community interests. An
advisory council, composed of a representative from each signatory
firm and a union member from each such firm, will advise on policy
and act as the connecting link between the trustees and the employees
in each plant. A medical director, empowered to select other pro­
fessional personnel, will be selected by the trustees, who are also
empowered to appoint a manager who will be responsible for the
administration of the institute.
The program does not provide cash weekly benefits, but offers the
following services, the details of which have not yet been formulated:

Hospitalization; periodic health examinations; general practitioners*
and specialists* care in the office, home, and hospital; maternity care;
surgery and deliveries; routine laboratory tests; X-rays, fluoroscopic
studies, and unusual laboratory tests; physiotherapy (sun lamp,
diathermy); injections (except unusual medicines); periodic dental
diagnosis; periodic eye diagnosis; orthopedic care; personal counseling
service; industrial-health and safety consultant service; health educa­
tion; health conservation (preventive measures, vaccinations, etc.);
revolving fund for new projects such as day nursery, rest camps;
reserve for institute functions during unemployment.
Workers who wish to do so, will be permitted to make their own pri­
vate payments to the institute for the purpose of extending some of
these services to their dependents. The plan specifically excludes
certain services; for example, preexisting chronic diseases which are
listed as exemptions when the initial examination is completed (no
exemptions to be applied to members in the union when the plan goes
into effect for any group), compensable accidents, and dental care.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102