By Tom Steward | Watchdog Minnesota Bureau
TWIN CITIES — The Affordable Care Act threatens the quality of health coverage and employment opportunities for 187,000 union workers and their dependents, a top official of a Twin Cities-based multi-employer union medical plan says.
The people affected — at least those he’s referring to — live in Minnesota, North Dakota, South Dakota and Wisconsin.
Also known as Taft-Hartley funds, multi-employer plans are negotiated under collective bargaining agreements and jointly administered by unions and employers.
About 50 union locals representing carpenters, bricklayers, machinists, electrical workers, plumbers and other trades pool their resources through the Labor Management Health Care Coalition of the Upper Midwest to leverage high quality benefits at affordable rates.
But LMHCC has warned that employer-sponsored medical coverage — called “Cadillac plans” by some — will be on the line as labor contracts come up for renewal under the new federal health-care rules.
“It is important to know when your CBA (Collective Bargaining Agreement) expires, because workers under CBAs expiring within the next two years are most at risk for changes in coverage,” Doug Rubbelke, LMHCC executive director, said in an email responding to questions from a Twin Cities labor publication and a Watchdog Minnesota Bureau inquiry.
As of 2018, employers will pay a 40 percent fee on the amount of health coverage above the ACA thresholds of $10,200 for individuals and $27,500 for families, putting pressure on unionized employers to explore cheaper options.
“Employers with expiring CBA’s will be tempted to see if they can produce more corporate profit by exiting the Taft-Hartley health system,” said Rubbelke, who also serves as executive director of the National Labor Alliance of Health Care Coalitions.
After health-care reform passed in 2010, hundreds of union health plans received federal waivers to cushion the impact of the first round of changes under the Affordable Care Act, including Roofers Local No. 96 — 2,838 members — the Carpenter and Joiners Welfare Fund — 21,364 members — and other LMHCC members in Minnesota and neighboring states.
But the Obama administration turned down labor’s last-ditch appeal to allow subsidies for the 20 million union members covered by multi-employer plans, even if they apply to their state insurance exchange.
“If workers go on the exchange when offered employer coverage that is affordable and covers Essential Health Benefits, they will not receive a subsidy because they have an offer of employer coverage that fits the ACA,” said Rubbelke.
In a double whammy, non-union employers whose workers obtain subsidized coverage on state exchanges could gain a competitive advantage in bidding for projects. Companies with fewer than 50 employees are exempt from taxes for failing to provide medical coverage, while companies with fewer than 25 full-time workers can qualify for tax credits.
“The anti-competitive effects of the ACA will be most dramatic in lower paid industries. The building and construction trades also will be particularly hard hit,” said Rubbelke. “Each employer, under the ACA, will be able to do an individual calculus regarding providing coverage (or not) for their workforce.”
The impact on workers and their families will vary depending on their fund and union. Longer term, the ACA could threaten the very viability of Taft-Hartley plans and undermine one of the biggest advantages labor unions have to offer their members — high quality health care coverage.
Meantime, there’s no quick cure for what ails multi-employer medical plans. “To create a different result, statutory change would be necessary, which will not happen in a deadlocked Congress,” Rubbelke said.
Contact Tom Steward at firstname.lastname@example.org
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