PacifiCare Health Systems, Cypress, Calif., said its 2004 per-share earnings could be negatively impacted by 14 cents to 19 cents because of a drop in expected membership caused by an ongoing labor dispute at three major Southern California grocery chains. As of Jan. 1, nearly 28,000 union members, who have been on strike since last October, ceased to be eligible for medical coverage through PacifiCare because they had not worked the required number of hours under the union's existing labor agreement. PacifiCare is one of three major insurers that provide coverage to United Food and Commercial Workers union members, who have been protesting benefit cuts by Vons, Ralphs and Albertsons supermarkets. In addition, about 100,000 union members and their families became ineligible to receive drugs through PacifiCare's pharmacy benefits unit. As a result, PacifiCare said it could fall short of its previous target for a moderate single-digit percentage increase in 2004 membership. Analysts had expected the insurer to earn $6.07 per share in 2004. -- by Laura B. Benko
PacifiCare says labor dispute may hurt earnings
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