Major Unions: Support of the Affordable Care Act "has come back to haunt us"

[Costanza]

Dear Leader Reid and Leader Pelosi:

When you and the President sought our support for the Affordable Care Act (ACA), you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat. Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.

Like millions of other Americans, our members are front-line workers in the American economy. We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.

Now this vision has come back to haunt us.

Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated “December 31, 2013” deadline for the employer mandate and penalties.

Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe. Perverse incentives are already creating nightmare scenarios:

First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.


Second, millions of Americans are covered by non-profit health insurance plans like the ones in which most of our members participate. These non-profit plans are governed jointly by unions and companies under the Taft-Hartley Act. Our health plans have been built over decades by working men and women. Under the ACA as interpreted by the Administration, our employees will 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.

And finally, even though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies. Taken together, these restrictions will make non-profit plans like ours unsustainable, and will undermine the health-care market of viable alternatives to the big health insurance companies.

On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.

We believe that there are common-sense corrections that can be made within the existing statute that will allow our members to continue to keep their current health plans and benefits just as you and the President pledged. Unless changes are made, however, that promise is hollow.

We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions.

We are looking to you to make sure these changes are made.

James P. Hoffa
General President
International Brotherhood of Teamsters

Joseph Hansen
International President
UFCW

D. Taylor
President
UNITE-HERE

http://blogs.wsj.com/corporate-inte...roy-the-very-health-and-wellbeing-of-workers/

 

[Costanza]

What’s Behind The Big Union Attack On Obamacare?
BRIAN BEUTLER JULY 22, 2013

You know things have gone weird in the runup to Obamacare’s big rollout when Republicans are quoting big-name union leaders to make the case for scrapping the whole law.

But it turns out this alliance of convenience is bound by two interwoven acts of self-interest: the GOP’s unwillingness to fix one flawed piece of the law; and certain unions’ efforts to create a special carveout for their members — to offset potential disruptions Obamacare might create for workers and unions — at a politically vulnerable moment for the ACA.

Ironically, when Republicans side with labor against Obamacare, they’re unintentionally and obliquely endorsing efforts to secure tax subsidization for unions.

In a recent letter to the two top Democrats on Capitol Hill, the leaders of the Teamsters, United Food and Commercial Workers, and Unite Here wrote grimly about Obamacare, whose key benefits kick in five short months from now.

“nless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class,” the letter reads.

They raise three concerns in their letter. The first is well known.

“[T]he law creates an incentive for employers to keep employees’ work hours below 30 hours a week,” the letter explains. “Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”

This is a real issue, and was a big part of the reason the Obama administration has delayed implementation of the law’s employer mandate for one year. Ideally, Congress would simply tweak the offending provision, but the GOP has committed to never tinkering with the law to make it better, and so the provision in question does threaten worker compensation and benefits.

Until the GOP moves off its position, there’s nothing Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi can do to fix it.

But that complaint serves as window dressing for the nex two items on the list, which are at the core of their concerns.

Instead of teaming up with big private insurers, some employers and unions have for years jointly run their own, non-profit group plans. These so-called Taft-Hartley plans function for many purposes like regular employer-sponsored insurance, and are treated as such in the tax code: employer contributions to premiums are tax deductible, and employee contributions are pre-tax. Nevertheless, unions are beseeching Democrats to reinterpret or change the law so that these particular beneficiaries also benefit from new tax credits intended to subsidize individuals who will be purchasing their own insurance in the exchanges. A double subsidy.

“Under the ACA as interpreted by the Administration, our employees will [be] treated differently and not be eligible for subsidies afforded other citizens,” the letter reads. “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.”

The comparison is apples to oranges. The ACA is quite clear that workers with access to tax-preferred, affordable group coverage won’t be eligible for new subsidies that will be provided to uninsured people on the exchanges.

“If you’re eligible for a Taft-Hartley plan you’re treated as if you have employer health care, and you can’t get a premium tax credit,” explains Timothy Jost, an ACA expert at Washington and Lee University law school. “They’re not happy about that, because they want premium tax credits.”

But that would be double dipping. The ACA was designed to dissuade managers of group plans from dumping their workers on to the exchanges. It thus largely preserves existing tax subsidies for those who provide and receive group insurance — including Taft-Hartley plans. It separately establishes new pooled markets for individuals, and creates a new tax subsidy so that middle class people in those markets can afford to purchase insurance. Nobody in the exchanges gets to exclude their premium contribution from their income taxes; and nobody in a group plan gets to supplement their tax exclusion with a new exchange subsidy.

The authors of the letter want workers in Taft-Hartley plans to get both benefits.

For unions, the idea is a solution to a largely unrelated problem. They’re concerned that the ACA will entice employers — particularly small employers with unionized, low-income workers — to abandon the Taft-Hartley funds they contribute to, and place their workers into state-based exchanges instead causing the funds themselves to disintegrate.

If the funds disintegrate, some workers will get a good deal in the exchanges, while others — temporary workers with sporadic pay, for instance — grapple with temporary hardships, if their subsidies don’t fully cover the cost of their insurance. (In a February 2012 article for Benefits Magazine, employee benefit lawyers at the firm Seyfarth Shaw concluded there are “compelling reasons why bargaining parties may choose to continue to maintain multiemployer plans even if they cannot operate within the exchanges.”)

The solution unions are seeking, though, would effectively amount to taxpayer subsidization of unions and their employer partners at unknown cost. And it wasn’t part of the final version of the ACA, or publicly debated during the legislative process.

“Who knows what was discussed with whom when the law passed, but there was nothing on the face of the statute suggesting anyone other than people who aren’t offered affordable group coverage will be eligible for premium tax credits,” explains Gary Claxton, vice president at the Kaiser Family Foundation and director of the Health Care Marketplace Project. “I don’t see how when reading that how anybody with Taft-Hartley would be eligible for tax credits. I don’t see the legal argument. Maybe there’s some memo or some legal interpretation. Maybe they thought that there was a provision that they wanted in there that didn’t make it in. But it’s difficult to see.”

“What the unions are saying is ‘We have a problem here, can you help us fix it,’” explains Jared Bernstein, a liberal economist at the Center on Budget and Policy Priorities who served as Vice President Joe Biden’s chief economist. “They’re saying ‘can you help us here, can you bend the rules,’ and it’s a tough ask for the government.”

“There are lots of exceptions under this law,” Jost added. “[This issue] bubbled up to the surface pretty quickly [after it passed] and my response was where were you guys when this was being put together.”

Officials for the Teamsters and Unite Here would not comment on the record for this article. However, union officials have explained their grievances in multiple venues over the past several months.

Many UFCW members have what are known as multi-employer or Taft-Hartley plans. According to the administration’s analysis of the Affordable Care Act, the law does not provide tax subsidies for the roughly 20 million people covered by the plans. Union officials argue that interpretation could force their members to change their insurance and accept more expensive and perhaps worse coverage in the state-run exchanges.
[UFCW President Joe] Hansen, who is also the head of the Change to Win labor federation, told The Hill that his members often negotiate with their employers to receive better healthcare services instead of higher wages. Those bargaining gains could be wiped away because some employers won’t have the incentive to keep their workers’ multi-employer plans without tax subsidies.​

“You can’t have the same quality healthcare that you had before, despite what the president said,” Hansen said. “Now what’s going to happen is everybody is going to have to go to private for-profit insurance companies. We just don’t think that’s right. … We just want to keep what we already have and what we bought at tremendous cost.”

On a related note, the unions’ letter takes issue with the fact that under the ACA, Taft-Hartley plans, like all plans, will contribute to a reinsurance fund that will backstop insurers on state exchanges, in the event that there’s a transition period during which a disproportionately sick and elderly population enrolls for benefits.

“If the claims are above a certain amount, you will get reinsurance to help cover your cost,” Jost explains.

But all group plans will contribute to this pool, not just Taft-Hartley plans. And yet the letter suggests unions would like a special exemption from that fee as well.

“[E]ven though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies,” the letter reads.

http://tpmdc.talkingpointsmemo.com/...h-for-special-treat-under-the-law.php?ref=fpa

 

[SPECTRE1]

The minimum wage went 10 years without an increase, than it was bumped up slightly in 2007. Requiring businesses to provide healthcare is really an increase in minimum wage.

I think another minimum wage increase should be made if companies are part timing workers to avoid healthcare costs. If minimum wage tracked inflation, workers would be making $12 an hour. They are getting more greedy with already low wages plus healthcare that still would not equal the labor rate if the minimum wage tracked inflation.


Whenever a company provides a fringe benefit that an employee will incur such as healthcare; a business can bulk purchase saving money for the employee. This indirectly saves the business money by allowing them to pocket those savings with lower wages. Companies should care what costs employees are paying and whether they can do something to save that employees money which will reduce the pressure to demand higher wages.

If employees have to purchase their healthcare individually and inefficiently, that higher costs drives employees to strike and demand higher wages. However, if a company saves employees $500,000 with bulk purchasing healthcare, even though this costs is not on the books, this savings trickles down to the company. This is $500,000 in wages a company does not have to provide to an employee.

A business will end up paying for this inefficiency eventually down the road.

 

[Upgrade Dave]

What’s Behind The Big Union Attack On Obamacare?
BRIAN BEUTLER JULY 22, 2013

You know things have gone weird in the runup to Obamacare’s big rollout when Republicans are quoting big-name union leaders to make the case for scrapping the whole law.

But it turns out this alliance of convenience is bound by two interwoven acts of self-interest: the GOP’s unwillingness to fix one flawed piece of the law; and certain unions’ efforts to create a special carveout for their members — to offset potential disruptions Obamacare might create for workers and unions — at a politically vulnerable moment for the ACA.

Ironically, when Republicans side with labor against Obamacare, they’re unintentionally and obliquely endorsing efforts to secure tax subsidization for unions.

In a recent letter to the two top Democrats on Capitol Hill, the leaders of the Teamsters, United Food and Commercial Workers, and Unite Here wrote grimly about Obamacare, whose key benefits kick in five short months from now.

“nless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class,” the letter reads.

They raise three concerns in their letter. The first is well known.

“[T]he law creates an incentive for employers to keep employees’ work hours below 30 hours a week,” the letter explains. “Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”

This is a real issue, and was a big part of the reason the Obama administration has delayed implementation of the law’s employer mandate for one year. Ideally, Congress would simply tweak the offending provision, but the GOP has committed to never tinkering with the law to make it better, and so the provision in question does threaten worker compensation and benefits.

Until the GOP moves off its position, there’s nothing Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi can do to fix it.

But that complaint serves as window dressing for the nex two items on the list, which are at the core of their concerns.

Instead of teaming up with big private insurers, some employers and unions have for years jointly run their own, non-profit group plans. These so-called Taft-Hartley plans function for many purposes like regular employer-sponsored insurance, and are treated as such in the tax code: employer contributions to premiums are tax deductible, and employee contributions are pre-tax. Nevertheless, unions are beseeching Democrats to reinterpret or change the law so that these particular beneficiaries also benefit from new tax credits intended to subsidize individuals who will be purchasing their own insurance in the exchanges. A double subsidy.

“Under the ACA as interpreted by the Administration, our employees will [be] treated differently and not be eligible for subsidies afforded other citizens,” the letter reads. “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.”

The comparison is apples to oranges. The ACA is quite clear that workers with access to tax-preferred, affordable group coverage won’t be eligible for new subsidies that will be provided to uninsured people on the exchanges.

“If you’re eligible for a Taft-Hartley plan you’re treated as if you have employer health care, and you can’t get a premium tax credit,” explains Timothy Jost, an ACA expert at Washington and Lee University law school. “They’re not happy about that, because they want premium tax credits.”

But that would be double dipping. The ACA was designed to dissuade managers of group plans from dumping their workers on to the exchanges. It thus largely preserves existing tax subsidies for those who provide and receive group insurance — including Taft-Hartley plans. It separately establishes new pooled markets for individuals, and creates a new tax subsidy so that middle class people in those markets can afford to purchase insurance. Nobody in the exchanges gets to exclude their premium contribution from their income taxes; and nobody in a group plan gets to supplement their tax exclusion with a new exchange subsidy.

The authors of the letter want workers in Taft-Hartley plans to get both benefits.

For unions, the idea is a solution to a largely unrelated problem. They’re concerned that the ACA will entice employers — particularly small employers with unionized, low-income workers — to abandon the Taft-Hartley funds they contribute to, and place their workers into state-based exchanges instead causing the funds themselves to disintegrate.

If the funds disintegrate, some workers will get a good deal in the exchanges, while others — temporary workers with sporadic pay, for instance — grapple with temporary hardships, if their subsidies don’t fully cover the cost of their insurance. (In a February 2012 article for Benefits Magazine, employee benefit lawyers at the firm Seyfarth Shaw concluded there are “compelling reasons why bargaining parties may choose to continue to maintain multiemployer plans even if they cannot operate within the exchanges.”)

The solution unions are seeking, though, would effectively amount to taxpayer subsidization of unions and their employer partners at unknown cost. And it wasn’t part of the final version of the ACA, or publicly debated during the legislative process.

“Who knows what was discussed with whom when the law passed, but there was nothing on the face of the statute suggesting anyone other than people who aren’t offered affordable group coverage will be eligible for premium tax credits,” explains Gary Claxton, vice president at the Kaiser Family Foundation and director of the Health Care Marketplace Project. “I don’t see how when reading that how anybody with Taft-Hartley would be eligible for tax credits. I don’t see the legal argument. Maybe there’s some memo or some legal interpretation. Maybe they thought that there was a provision that they wanted in there that didn’t make it in. But it’s difficult to see.”

“What the unions are saying is ‘We have a problem here, can you help us fix it,’” explains Jared Bernstein, a liberal economist at the Center on Budget and Policy Priorities who served as Vice President Joe Biden’s chief economist. “They’re saying ‘can you help us here, can you bend the rules,’ and it’s a tough ask for the government.”

“There are lots of exceptions under this law,” Jost added. “[This issue] bubbled up to the surface pretty quickly [after it passed] and my response was where were you guys when this was being put together.”

Officials for the Teamsters and Unite Here would not comment on the record for this article. However, union officials have explained their grievances in multiple venues over the past several months.

Many UFCW members have what are known as multi-employer or Taft-Hartley plans. According to the administration’s analysis of the Affordable Care Act, the law does not provide tax subsidies for the roughly 20 million people covered by the plans. Union officials argue that interpretation could force their members to change their insurance and accept more expensive and perhaps worse coverage in the state-run exchanges.
[UFCW President Joe] Hansen, who is also the head of the Change to Win labor federation, told The Hill that his members often negotiate with their employers to receive better healthcare services instead of higher wages. Those bargaining gains could be wiped away because some employers won’t have the incentive to keep their workers’ multi-employer plans without tax subsidies.​

“You can’t have the same quality healthcare that you had before, despite what the president said,” Hansen said. “Now what’s going to happen is everybody is going to have to go to private for-profit insurance companies. We just don’t think that’s right. … We just want to keep what we already have and what we bought at tremendous cost.”

On a related note, the unions’ letter takes issue with the fact that under the ACA, Taft-Hartley plans, like all plans, will contribute to a reinsurance fund that will backstop insurers on state exchanges, in the event that there’s a transition period during which a disproportionately sick and elderly population enrolls for benefits.

“If the claims are above a certain amount, you will get reinsurance to help cover your cost,” Jost explains.

But all group plans will contribute to this pool, not just Taft-Hartley plans. And yet the letter suggests unions would like a special exemption from that fee as well.

“[E]ven though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies,” the letter reads.

http://tpmdc.talkingpointsmemo.com/...h-for-special-treat-under-the-law.php?ref=fpa

Good post.

 

[Costanza]

What I found noteworthy here was the parallel between these arguments and common conservative arguments about raising the minimum wage endangering jobs and reducing the hours of workers.