Health and Safety

Union Health Funds Facing Disaster

June 2, 2014
By Neal Tepel

Washington, DC – When President Barak Obama first proposed a law that would provide quality healthcare for all Americans, organized labor was overwhelmingly supportive. AFL-CIO President Richard Trumka called Obamacare a "momentous step forward," at the time of the passage of Obamacare.

Now labor contracts are being renegotiated with most in danger of costing more for unions.  Labor organizations across the country are facing higher premium costs, less coverage or both.

Although organized labor continued to support the principles of the Affordable Health Care Act, concerns were voiced as the AFLCIO convention approached in September 2013.

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”. It's now clear that the law’s mandates negatively affect healthcare coverage for union members. Unless there are changes in the legislation, unions will be forced to either chip in or lose out.

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.”

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.

The AFL-CIO resolution regarding the Affordable Health Care Act passed at the September 2013 convention 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. The AFL-CIO health care resolution written as a compromise stated: 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."

At the convention labor leaders were nervously vocal with their concerns. "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.

To date adjustments needed for the survival of union health programs have not been addressed and the next phase of the law could bankrupt many union health funds. The Cadillac Tax will require multi-employer Taft-Hartley plans to pay a 40 percent tax since these plans have been classified as high quality health services. This phase of the Affordable Health Care Act cost begins 2018. Unions will be penalized for being progressive in providing excellent health care services to members.

Many national union leaders had concerns with the Affordable Health Care Act from its start but stayed loyal to President Obama’s program aimed at providing healthcare for all Americans. There was general belief, based on conversations behind the scenes, that President Obama would tweak the rules for the Taft-Hartley health funds later, in exchange for union assistance in passing the law. Unfortunately, the major legislative changes needed for survival of union health services has not happened. Without adjustments to the ACA, many unions will be forced to reduce health services to members and some health funds will face bankruptcy.

June 2, 2014

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