This is the latest in a series of articles on the pending impact of the
Affordable Care Act.
The nation’s union leaders aren’t necessarily joining in with the chorus of conservatives calling to totally repeal the nation’s new health care law, the Patient Protection and Affordable Care Act (ACA).
But in recent weeks union leaders have been demanding some key provisions of the ACA be changed so that the law won’t negatively affect multi-employer plans like those that cover the unionized construction industry.
In our last issue, we explained how leaders of the Teamsters, United Food and Commercial Workers and UNITE Here all complained that the Affordable Care Act, without being fixed, would “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.” And in April, the president of the Roofers did indeed call for “repeal or complete reform” of the new health care law.
Now adding his voice to the mix is International Brotherhood of Electrical Workers President Edwin Hill. Last month the IBEW issued A White Paper on the Effects of the Patient Protection and Affordable Care Act on multi-employer health plans – and they said under the current reading of the law, the prognosis for building trades union plans isn’t good. They took out ads in Washington D.C. publications to air their views to the nation’s policymakers.
“Multi-employer plans have been a major American success story in health care,” Hill said in an IBEW website message. “But that could change dramatically if the unfinished business in Affordable Health Care Act is not addressed.”
The IBEW is calling on the Obama Administration, or Congress, to make fixes to the ACA so that multi-employer plans, like those held by all the building trades unions – won’t be harmed by the new law. Following are excerpts of the IBEW’s report on the affects of the new health care law.
- For over 65 years, the International Brotherhood of Electrical Workers and its employers in the construction industry have provided affordable, high-quality health care coverage for workers through multi-employer health plans.
“Across all industries, the current multi-employer plan system provides affordable, high-quality health care coverage to millions of American workers, retirees, and families. Participating in a multi-employer plan allows businesses to spread risk across a larger, more diverse pool of individuals, which reduces premium costs. In addition, construction industry employers have the ability to hire short-term employees without the burden of increased administrative costs.”
With that being stated, the IBEW listed four major concerns with ACA:
- High employee threshold for ACA requirements. “The ACA does not penalize small businesses with less than 50 employees for failing to offer their employees health care coverage. This exempts almost all construction industry employers from the ACA employer mandate. By not requiring construction employers to offer health care coverage to their employees, the ACA begins a race to the bottom with respect to benefits.
“Employers contributing to multi-employer health plans will be forced to choose whether to provide health care benefits for their employees or remain competitive. This high employee threshold will have a devastating effect on the entire construction industry. Approximately 93 percent of employers in the industry have fewer than 20 employees.”
The problem, reports Single Payer News, a group urging health care reform, is that the new law “gives low-road companies in construction and other industries an incentive to not provide their employees’ health care, putting additional pressure on employers that do.”
- The Reinsurance Fee. Health insurance “exchanges” are a central part of the new law. One labor attorney called them “an insurance shopping center of sorts where individuals who do not have coverage from their employers can look for insurance and small businesses can look to purchase policies for their employees.”
The IBEW report said “beginning in 2014 and continuing until 2016, either the Department of Health and Human Services or individual states will assess a fee for everyone enrolled in a plan outside of the exchanges. Health insurance carriers will pay the fees on behalf of employers who sponsor fully insured plans.
“Presumably, the carrier will pass this cost and any additional fee on to the employer or employee through increased premiums. For self-insured plans, which includes the majority of multi-employer health plans, the plan administrator will be responsible for paying the assessment.
“In multi-employer plans, trustees set the benefits, corresponding contributions, premiums, and employee co-pays. Just like fully insured plans, self-insured plans will recoup the expense of the reinsurance fee by increasing the employee and employer contribution amounts. This means collective bargaining agreements between IBEW local unions and their contractors will need to be renegotiated.
“This creates an opportunity for the multi-employer health plan structure to change, shifting more individuals into the exchanges and leaving fewer dollars to fund ACA provisions. As individuals leave multi-employer plans, there will be fewer people to shoulder the reinsurance fees — resulting in higher per-person costs and forcing even more individuals into the exchanges.”
- Defining qualified health plans. “As currently structured, the ACA does not include multi-employer health plans in the definition of a qualified health plan. As a result, employees do not qualify for the subsidy to offset the cost of health care coverage and employers do not qualify for the tax credit for contributions to self-insured multi-employer plans.
“In order to fix this problem, the implementing regulations should deem all multi-employer health plans as qualified health plans. Doing so would alleviate two major problems with the ACA.
“First, assuming IBEW members meet all other qualifications, the ACA individual subsidy to offset the cost of health care coverage would be available to them. Second, defining multi-employer health plans as qualified health plans would allow otherwise eligible small employers to receive the tax credit for contributions to multi-employer health plans.
“This disparity in treatment between collectively bargained plan contributions and the contributions to other health plans will create another competitive disadvantage for employers who have been providing quality coverage for their employees for years. Failure to deem multi-employer health plans as qualified health plans will force employers to reconsider participation in multi-employer health plans in order to remain competitive.”
- The lack of specific guidance for multi-employer health plans. “Despite many efforts by the National Coordinating Committee for Multi-employer Plans (NCCMP) and other groups, application of the ACA to multi-employer health plans remains unclear.”
In some cases, “transitional rules” have provided guidance. But “no clear
guidance has been given with respect to the effect of other provisions,” the