When Walford Hall retired from his job as a butcher after 33 years with Giant Food Inc., he figured he could get by on his $500 a month company pension and whatever money he got from Social Security.

They knew it would be tight, said Hall's wife, Viola, but their Rockville home was paid for and they didn't have many expenses beyond Montgomery County real estate taxes, an $80 a month premium for health insurance and the money they spent for groceries. She figured once all the bills were paid, they'd still have about $300 a month left over. Then came the Nov. 30 notice from the United Food and Commercial Workers Union telling Hall his monthly premium for health insurance was about to rise 115 percent from $80 to $171.95 a month.

Viola Hall isn't sure how she and her husband, who retired in 1985, are going to make it. "We don't have any other income," she said. "We live off these two checks." She said her husband's Social Security check is a little more than $600 a month.

"He really worked hard and gave his all to the company," she said.

"Now we're going to have to cut our grocery bill to about $20 a week" to pay for the health insurance.

For Hall and nearly 4,000 other Washington- and Baltimore-area retirees at Giant, Safeway Stores Inc. and Super Fresh Markets, the notices from their former employers are a first-hand lesson in one of the biggest economic issues of the workplace today: the explosion in retiree health care costs.

With an aging work force, the health care promises of the past have become the cost crisis of today for employers nationwide. Ten years ago, retiree health care was barely considered a cost item by most employers who generally promised full medical benefits in retirement regardless of age or years of service.

However, the mounting cost pressures have forced employers to rethink their retiree health care programs. A number of companies are separating health-plan eligibility requirements from pension eligibility. Others have begun to drop retiree health care benefits altogether.

The problem at the area supermarket chains began last year when Local 400 of the United Food and Commercial Workers Union negotiated a new three-year contract for its members. As part of the contract, the union agreed that retirees would pay a greater share of their health care costs with first-year premium costs estimated at $80 a month for 1990. The company agreed to pay up to $152.23 a month in 1990, and a maximum of $162.23 a month in 1991.

Regardless of age, senior employees at the three supermarkets can retire after 30 years of service with the same health care benefits they had as active employees. When the costs of the first year's premiums for retirees were finally calculated, however, they were $97 a month, not the $80 originally estimated, said Harry Burton, the attorney representing the three grocery chains on the labor-management health fund. At that point, Burton said, the union argued to keep the payments at $80 and to pay for the extra $17 a month out of health fund reserves, with premiums to be brought into line in 1991.

At the same time, the health fund experienced a sharp rise in usage by retirees. The combination, according to Burton, resulted in costs of $11.9 million for 1990. The employer contribution covered $6.8 million of the costs and the employee premiums another $2.1 million, Burton said, leaving a deficit of $2.9 million. The sharply higher premiums for 1991 were calculated to cover the 1990 deficit.

"The companies are not really doing anything more than holding us to ... what we've bargained," said Local 400 President Tom McNutt, who admits that "none of us anticipated the experience we've run into."

McNutt said the union has proposed limiting the 1991 premium payments for retirees to $105 a month and having the company "eat" the $2.9 million deficit out of current health fund reserves. So far, the company has refused.

If the union wants relief on the premium payments, Burton said, it's going to have to pay for it with concessions somewhere else in the contract. "There are a lot of different plan designs that could be pursued," he said.

One possibility the companies want to explore would be to reduce the benefits for retirees and use the savings to pay for the deficit and reduce future premiums.

Although the union insists it's prepared to wait until the next round of contract negotiations rather than make concessions, it is involved in "discussions" with the companies.

In the meantime, there are mounting calls from retirees for relief. "There are a lot of people who can't eat if they pay this," said Philip K. Park, a former Giant meat cutter from Silver Spring who has retired to Elizabeth City, N.C. "It hurts that much."