Unions carefully backing away from ObamaCare

Paul Kersey

Labor law expert, occasional smart-aleck, defender of the free society.

Paul Kersey
September 13, 2013

Unions carefully backing away from ObamaCare

“We love what you were trying to do but we hate what you actually did.”

Following complaints about ObamaCare made by many of its constituent unions, the AFL-CIO has rendered its verdict on the Affordable Care Act, or ACA, commonly referred to as ObamaCare. From the labor federation’s convention in Los Angeles come four pages of finely tuned verbiage spiced with numbing bureaucratic minutia that boil down to “We love what you were trying to do but we hate what you actually did.

The resolution marks the end of all pretenses that ObamaCare does anything other than make a hash of the private insurance market. The overall confusion and expense has expanded to the point where unions – who originally backed the president’s health insurance law – have had to take public notice of it. This has been going on for several months, as more and more union officials have aired complaints about ObamaCare’s treatment of union-sponsored health programs, its taxation of high-cost insurance (that is frequently included in union contracts) and its perverse incentive for employers to hire part-time staff.

The whole business of registering a complaint against ObamaCare is complicated by the fact that unions were some of the bill’s biggest supporters back when it was actually being jammed through Congress in 2010. So naturally, the AFL-CIO pretends that the problem isn’t the law as much as the way it is being implemented:

… the federal agencies administering the ACA have interpreted the Act in ways that are threatening the ability of workers to keep health care coverage through some collectedly bargained, non-profit health care funds …

… contrary to the law’s intent, some workers might not be able to keep their coverage and their doctors because the federal agencies’ current implementation plans will be highly disruptive to the operation of Taft-Hartley multiemployer plans …

But if you digs in deep enough, you’ll see some acknowledgement that the health insurance law itself is part of the problem:

… the ACA includes a limited employer responsibility penalty that applies just to medium and large employers, and then only for employees who work 30 hours or more per week … Employers are preparing to avoid paying penalties by cutting workers’ hours and pay, thereby creating a new underclass of less-than-30-hour workers …

And also some recognition – probably unintended – of just how convoluted the whole thing is:

… it has been a common practice for public unions in New York and elsewhere to build a benefit structure through three different plans: 1) a comprehensive basic health plan negotiated with the employer, providing hospital, medical and related benefits; 2) a per-employee cash contribution to a union-sponsored welfare trust fund that is used to provide supplemental benefits such as prescription drugs and other health care benefits; and 3) voluntary member-paid benefits, sponsored by the union or union trust funds for insurances like umbrella policies that cover catastrophic health care claims. Under the current construction of the ACA, each separate insurer (or plan if the benefit is self-funded) will pay the Transitional Reinsurance (TR) and Patient Centered Outcomes Research Institute (PCORI) fees. This means that these fees will be levied three times on the same group of workers. These fees should only be charged once and only to the plan sponsor of the base health plan, as is the ACA rule for single employers …

You got all that?

There is at least one report that an early draft of the AFL-CIO’s resolution on ObamaCare called for the law’s repeal. That turned out to be a bridge too far – the unions do not have the courage to admit that the law they supported is beyond repair – but it does indicate how badly ObamaCare has turned out for unions.

The sad thing is, there is nothing to indicate that union officials are yet willing to reconsider their conviction that health insurance should be provided mainly by government – instead they repeated their call for a single-payer health system. Union bosses were willing to turn health care over to the government in 2010. Now that they have seen how badly government can treat them, these same union bosses still do not have the nerve to take health care back from the feds. The unions’ bungling in 2010, and their lack of courage now, will cost workers dearly.

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