Health and Safety

August Labor Bulletin

August 27, 2016 

Michael Jordan


By Michael Jordan

Is Healthcare Reform Disrupting Union Member Health Benefits?

While we’ve focused on some of the opportunities healthcare reform has offered labor and multi-employer health plans, in this issue of the MagnaCare Labor Bulletin, we want to examine some of the ways that the Affordable Care Act (ACA) may be disrupting health benefits for union members.   

The Problem

The latest figures on union membership from the Bureau of Labor Statistics show that membership continues to decline and is now lower than at any point in the last century. While a number of factors have influenced this decline, one contributing cause has been unintended consequences of healthcare reform.

With the ACA’s health exchanges enabling more individuals to purchase health insurance in each state, smaller employers who now pay into multiemployer plans may decide their employees can get a better deal there. Furthermore, rising healthcare costs continue to plague particular unions, especially those when the majority of members are low-income. This, in turn, undermines a key reason people join unions – for the excellent health benefits.

Sources/Learn More:

With Fewer Members, a Diminished Political Role for Wisconsin Unions
New York Times

Labor Unions: Obamacare Will 'Shatter' Our Health Benefits, Cause 'Nightmare Scenarios'
Forbes

Before Its News
Unions and Obamacare: 5 questions
Politico

If unions lose their ability to negotiate with employers for benefts, their power to organize workers is compromised. Additionally, a growing number of union members have stopped paying monthly dues, citing higher pension and healthcare contributions.

Perhaps the biggest impact on unions from healthcare reform is the Cadillac tax – delayed to 2020. This 40 percent excise tax on expensive plans is going to hit union plans hard. Unlike most individuals negotiating compensation, union negotiators make a clear trade-off between wages and other benefits, especially health plans. Also, union plans are that much more expensive because union membership tends to skew toward older workers.

Sources/Learn More:
Unions Suffer for Obamacare
Bloomberg
With Fewer Members, a Diminished Political Role for Wisconsin Unions

New York Times
Labor Unions: Obamacare Will 'Shatter' Our Health Benefits, Cause 'Nightmare Scenarios'

Unions and Obamacare: 5 questions
Politico

Labor Bulletin

It is important for unions to maintain control over the ability to provide healthcare through collective bargaining agreements, for the sake of organizing and preserving the high standard of union health benefits. What’s more, the push to defeat the Cadillac tax should ramp up as the presidential election draws near.

Fortunately, as unions and multi-employer health plans consider health benefit compromises, they will discover an abundance of innovative cost-control strategies to help them optimize their health plans. This is especially significant for Taft-Hartley plans because their members are highly aware of the cost of healthcare dollars coming out of their paychecks. Population health management fosters responsibility and smarter healthcare shopping among members. Incentives to control costs through preventative care, disease management and group purchasing coalitions can serve as a hedge against cost-shifting and overall care inflation.

Click here to view Michael’s video on how Is healthcare reform disrupting union benefits.

August 27, 2016

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