October 1, 2013
By Neal Tepel
The AFL-CIO resolution regarding the Affordable Health Care Act passed at the September 2013 convention this past September put the Obama administration on notice that issues and concerns with the legislation must be addressed soon. Several unions at the convention said the Obama administration's interpretation of the Affordable Health Care Act would virtually trash multi-employer health care plans, which cover 20 million workers, retirees, and their families.
These plans in industries as construction, food processing, restaurants and seafaring – let joint union-management boards run health care plans. Union leaders are concerned the way Obamacare affects multi-employer health plans. These employer plans, also called Taft-Hartley plans, are health insurance benefits typically arranged between a labor union and employer. The Taft-Hartley plans aren't eligible for subsidies under the terms of the Affordable Care Act and the government treats them as employer-based health-care plans for tax purposes.
"If the ACA is not fixed, if it destroys the health and welfare funds we fought for, it needs to be repealed!" said Terry O'Sullivan, president of the Laborers International Union of North America, at the AFL-CIO convention. "The proud men and women we represent cannot be collateral damage!" of the health care law.
The AFL-CIO health care resolution written at the September convention as a compromise stated: The AFL-CIO prefers a single-payer. The multi-employer plans "should have access to the ACA's premium tax credits and cost-sharing reductions – just as for-profit insurance companies will." Workers on-the-job 20 or more hours a week must be covered by ACA's employers. (The ACA now sets limits at 30 hours per week and employers are cutting worker hours to save money under the act.) The employer responsibility rules should extend to construction companies with at least five employees, not fifty. Healthcare benefits should not be taxed.
In an August 13th letter to the White House, Laborers President Terry O’Sullivan said the Affordable Care Act (ACA) gives non-union contractors “an unfair competitive advantage” over union shops. “The ACA imposes substantially higher costs on multi-employer funds and union members, while enabling non-union employers to continue escaping responsibility and shift their employees’ health insurance costs to the taxpayers.”
UNITEHERE President D. Taylor discussing Obamacare in a Las Vegas Sun article July 26th said the following: “The administration has repeatedly had all kinds of changes and waivers in the law”. “They have completely shut out the concerns and unintended consequences that Obamacare has on nonprofit insurance plans … We want to just be treated as equals, no special treatment, just equals, and the unintended consequences of the act doesn’t do that, and frankly how the Treasury and IRS have interpreted it, the bill was intended to promote competition and in fact is doing just the opposite. It is driving not-for-profits to be unaffordable”.
A letter signed by IBT President James Hoffa, UFCW President Joe Hansen and UNITEHERE President D. Taylor – to the White House and key legislators stated that "under the ACA as interpreted by the Administration, our employees will be treated differently and not be eligible for subsidies afforded other citizens. As such, many employees will be relegated to second-class status and shut out of the help the law offers to for-profit insurance plans." This will decimate membership in these plans as employers dump union workers onto public exchanges.
According to the Obama administration the Taft-Hartley plans do not qualify to receive subsidies. They receive the tax breaks given to employer-based plans and they don’t offer insurance to anyone who wants it which disqualifies them from the insurance marketplaces and the associated subsidies.
The unions have consistently argued that their plans serve a different purpose, and a different group, than traditional employer-based plans. Labor Organizations believe it’s important for the survival of Taft Hartley funds to receive the premium subsidies available on the exchanges – and this would require a waiver.