The Affordable Care Act (ACA) of 2010, also known as Obamacare, presents challenges to the multiemployer plans through which some unions bargain collectively to provide health care insurance for their members. These plans, often called Taft Hartley Plans, currently cover about 26 million workers, families, and retirees. Unless there is a major regulatory change made by Health and Human Services, these union negotiated plans will be struck a harsh blow once the exchanges go into effect in 2014.
A quiet effort by many unions to persuade the Obama administration to make this change is now becoming very public.
In an Op Ed published in The Hill, Joseph T. Hansen, President of the United Food and Commercial Workers (UFCW), said,
But as currently interpreted, the ACA would block these plans from the law’s benefits (such as the subsidy for lower-income individuals and families) while subjecting them to the law’s penalties (like the $63 per insured person to subsidize Big Insurance). This creates unstoppable incentives for employers to reduce weekly hours for workers currently on our plans and push them onto the exchanges where many will pay higher costs for poorer insurance with a more limited network of providers. In other words, they will be forced to change their coverage and quite possibly their doctor. Others will be channeled into Medicaid, where taxpayers must pick up the tab.
In addition, the ACA includes a fine for failing to cover full-time workers but includes no such penalty for part-timers (defined as working less than 30 hours a week). As a result, many employers are either reducing hours below 30 or discontinuing part-time health coverage altogether. This is a cut in pay and benefits workers simply cannot afford. For example, a worker making $10 an hour that has his or her schedule cut by six hours a week would lose $3,100 a year in income. With millions of workers impacted, this would have a devastating effect on our economy.
The effort of unions to persuade the Obama administration to change the regulations in order to resolve the problems was reported in the January 30, 2013, Wall St. Journal.
“Top officers at the International Brotherhood of Teamsters, theAFL-CIO and other large labor groups plan to keep pressing the Obama administration to expand the federal subsidies to these jointly run plans, warning that unionized employers may otherwise drop coverage.”
“We are going back to the administration to say that this is not acceptable,” said Ken Hall, general secretary-treasurer for the Teamsters, according to the WSJ article.
Many unions have been working through the National Coordinating Committee for Multiemployer Plans (NCCMP) to find a solution. In a memorandum to the Department of Health and Human Services, the NCCMP stated:
If subsidies are available only for plans purchased through Exchanges, employers contributing to multiemployer plans will face tremendous economic pressure to stop contributing to multiemployer plans…. Many employers will feel the need to drop coverage and access the subsidies to remain competitive.
On April 16, 2013, the United Union of roofers, Waterproofers and Allied Workers International President Kinsey M. Robinson issued a statement calling for a repeal or complete reform of President Obama’s Affordable Care Act (ACA). He stated that the union has supported President Obama for both terms in office but that the union’s concerns “over certain provisions in the ACA have not been addressed, or in some instances, totally ignored.”
“In the rush to achieve its passage, many of the Act’s provisions were not fully conceived, resulting in unintended consequences that are inconsistent with the promise that those who were satisfied with their employer sponsored coverage could keep it. These provisions jeopardize our multi-employer health plans, have the potential to cause a loss of work for our members, create an unfair bidding advantage for those contractors who do not provide health coverage to their workers, and in the worst case, may cause our members and their families to lose the benefits they currently enjoy as participants in multi-employer health plans,” Robinson stated.
The Cornell University Industrial and Labor Relations School recently held a special workshop on The Affordable Care Act: Impact on Multiemployer Plans. The materials from that educational event are available here.
So far there is no adequate answer from the Obama administation to the efforts of unions to resolve the issues. The state exchanges must be in place by October of 2013 so that they are ready to go byJanuary 1, 2014.
Many of the unions involved contend that regulations for the ACA could be written to allow the employers that pay into these union negotiated plans to receive the same subsidies that employers will receive in the exchanges. So far, that has not happened.
This is one of many conundrums that face unions as the costs of health care in our corporate-controlled, profit-oriented system make the maintenance of health benefits increasingly difficult to achieve.