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Weather Report
White House Says Union Workers Won't Get
Posted On: Sep 20, 2013

The Obama administration has rebuffed efforts from labor unions that would allow union workers to receive premium tax credits under the Affordable Care Act in addition to their employer-sponsored health coverage, according to a White House official.

In an e-mail to reporters describing President Barack Obama's discussions with labor union leaders at the White House Sept. 13, a White House official said the Treasury Department has sent a letter that makes it clear it “does not see a legal way for individuals in multiemployer group health plans to receive individual market tax credits as well as the favorable tax treatment associated with employer-provided health insurance at the same time.”

Still, the official said the administration “will work with multiemployer plans and other non-profit plans and encourage them to offer coverage through the Marketplace, on an equal footing, to create new, high-quality, affordable options for all Americans.”

The meeting included Obama; Vice President Joe Biden; Brent Booker, the secretary-treasurer of the Building and Construction Trades Department; Joseph T. Hansen, president of the United Food and Commercial Workers Union; Edwin D. Hill, international president of the International Brotherhood of Electrical Workers; William P. Hite, general president of the United Association of Plumbers and Pipe Fitters; Ken Hall, general secretary-treasurer of the International Brotherhood of Teamsters; D. Taylor, president of UNITE HERE; and Richard L. Trumka, president of the AFL-CIO.

The announcement follows warnings from two senior Republicans in Congress to Treasury Secretary Jacob J. Lew, saying any attempt by the administration to extend ACA premium and cost-sharing subsidies to union workers “will be met with strong resistance.”

The Republicans, Sen. Orrin Hatch (Utah) and Rep. Dave Camp (Mich.), said in their letter to Lew that the health care premium exchange subsidies were based on and designated specifically to ensure the principle that no individual may receive both the long-standing health insurance tax exclusion and exchange subsidies.

Labor Leaders Criticize ACA

On Sept. 11, the last day of the AFL-CIO quadrennial convention in Los Angeles, prominent labor leaders blasted the provisions of the health-care law, warning that if the law is left intact, the provisions would devastate union-backed health plans that were decades in the making.

“We'll be damned if we're going to lose our health care plan because of unintended consequences,” Laborers' International Union of North America General President Terry O'Sullivan told the convention.

Though LIUNA is willing to work with the Obama administration to address the issues affecting multiemployer plans, if they can't be fixed, the ACA should be repealed, O'Sullivan said.

Other union leaders, though not using the word “repeal,” were equally adamant about the need to change the law and the consequences for union members if those provisions were left intact.

Joseph Nigro, general president of the Sheet Metal, Air, Rail and Transportation Workers (SMART), said that if nothing has changed when the AFL-CIO meets again in four years, “I guarantee you won't need a quarter of this room,” he said referring to the cavernous hall at the Los Angeles Convention Center. “We won't be here.”

Access to Tax Credits

The occasion for the angry comments was a debate on a resolution reaffirming the organization's commitment to the goals of “health care for all” but also calling for major changes to the ACA.

In particular, the labor federation wants multiemployer union health plans to have access to the ACA's premium tax credits and to be exempt from the various taxes and fees now included in the ACA. Specifically, the resolution called for the ACA excise tax, reinsurance fee and other fees to be eliminated for collectively bargained plans, union-administered plans and other plans that cover union-represented workers.

The resolution, which ultimately passed with only the California Nurses Association opposed, also called for the law to apply “a full employer penalty” for companies that fail to provide affordable care for employees who work an average of 20 hours a week, rather than the 30-hour threshold now in place.

The group also wants to see employer shared-responsibility rules extended to more companies, especially to construction companies with five or more employees, rather than the 50-employee threshold contained in the ACA.

Obama Promise Recalled

The leaders of the Teamsters, UFCW and UNITE HERE sent a letter in July to Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) warning that unintended consequences in the ACA could have devastating effects on the plans that have provided affordable health care to millions of union members and their families for decades.

During the AFL-CIO debate, Robert Scardelletti, president of the Transportation Communications International Union/International Association of Machinists (TCU/AIM), said that under current ACA rules, his union's multiemployer health fund will have to pay $27 million in taxes.

The IBEW's Hill said that although his union supported Obama, current ACA regulations would devastate health-care coverage for 20 million workers.

“We're not about to let that happen,” he told the convention.

Several union leaders quoted Obama's promise that the ACA wouldn't require anyone who was satisfied with his or her current health coverage to change to another plan. Hill even cited the date of the promise—July 16, 2009—but said as it stands now, millions of union members wouldn't be able to keep their current coverage.

That promise “isn't true—and it wasn't true when he said it,” Scardelletti said.


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