Tobacco, Up in Smoke News Index Feedback Gateway Virginia

Trigon contract dropped / Union spurred Philip Morris decision

Saturday, June 27, 1998

BY CHIP JONES
Times-Dispatch Staff Writer

A labor-led boycott of Trigon Blue Cross Blue Shield over smoking lawsuits made its first mark yesterday when Philip Morris USA said it was yanking a chunk of business from the state's largest health insurer.

Philip Morris, the area's largest private employer and maker of Marlboro cigarettes, said it was dropping Trigon as the administrator of its vision plan for an estimated 5,000 hourly employees and their families.

Neither Trigon nor Philip Morris would say how much the contract is worth, but according to benefits specialists, such a claims-handling arrangement for that many people typically is worth more than $125,000.

More cuts may be coming. Philip

Morris' dental claims contract with Trigon may be pulled by this fall, company and union sources said.

The cigarette maker's decision came at the urging of the 600-member Machinists' union, whose leadership has targeted Trigon for joining a national coalition of 43 Blue Cross companies suing major cigarette companies such as Philip Morris for smokers' health costs.

"I really think this is a dirty thing for Trigon to pull," said Stephen Spain, the Machinists' chief who is spearheading the boycott.

The pro-tobacco effort appears to be spreading. The Richmond Regional Labor Council, representing 20,000 union members, plans to tackle the Trigon issue at an upcoming meeting.

"I plan on asking them to agree to boycott Trigon," Jack Dotson, president of the labor council, said yesterday.

The regional group includes the Communications Workers of America, electrical workers, sheet metal workers, and state government employees.

The 190,000-member Virginia State AFL-CIO will discuss a boycott at its August annual meeting in Williamsburg, said secretary-treasurer Jim Leaman.

"There's no telling how far [a boycott] could go," he said.

Trigon spokeswoman Jane Olsen said she had not been told of the upcoming labor discussions.

"We knew this was a sensitive issue," Olsen said.

She said of Philip Morris' decision to drop Trigon, "Obviously we're disappointed they dropped the plan. We valued their business."

Trigon's 1.8 million subscribers statewide include more than 10,000 farmers or tobacco manufacturers.

Despite the publicity, Trigon officials have said the loss of Philip Morris' accounts has scant effect on company profit.

Philip Morris, like many large companies, is self-insured, meaning it is financially liable for its employees' health claims. But the company uses Trigon to administer the plans.

Dotson, the regional labor leader, said many union members work at small companies that use Trigon for full health insurance coverage.

Canceling those policies "would have a bigger impact" on Trigon than the loss of claims processing, he said.

Dotson did not know how many of his members are covered by the Richmond-based health insurer.

Trigon also covers state employees, he noted, some of whom belong to the public employees' union.

Losing that business, Dotson said, "would be a major, major blow."

Two other Virginia tobacco companies, Richmond-based Universal Corp. and Danville's Dimon Inc., are considering dropping Trigon because of the national lawsuit, company officials said.

Philip Morris decided to drop Trigon's vision coverage effective Aug. 1 because it was "in the best interests of the company and its employees," spokeswoman Judy Jones said.

While declining to discuss labor's boycott, Jones said, "We regret Trigon's decision to join the coalition" of Blue Cross companies suing the tobacco industry.