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Labor Leader: Obamacare 'Needs To Be Repealed' If Demands Aren't Met

September 12, 2013

By Avik Roy

This week, in Los Angeles, leaders of the nation’s labor union movement gathered together for the AFL-CIO’s quadrennial convention. Along with the usual sessions on ‘political action,’ ‘solidarity’ and the like, union leaders shared their concerns about the impact of Obamacare on union-sponsored health insurance plans. Terence O’Sullivan, president of the Laborers’ International Union of North America, said, “If the Affordable Care Act is not fixed, and it destroys the health and welfare funds that we have fought for and stand for, then I believe it needs to be repealed.”

“We don’t want it to be repealed,” O’Sullivan continued. “We want it to be fixed,” by allowing union members with employer-sponsored health coverage to take advantage of subsidies intended for the uninsured. “We’ve had our asses kicked on retirement security and we know our health funds are under siege. We ask the president and Congress to do the right thing for the men and women we represent.”

AFL-CIO anti-Obamacare resolution was ‘softened’ at Obama’s behest

The AFL-CIO, at the convention, passed a resolution calling for Obamacare to be amended so that union-sponsored multiemployer plans, often called Taft-Hartley plans, would be eligible for special government subsidies. “The ACA should be administered in a manner that preserves the high-quality health coverage multi-employer plans have provided to union families for decades and, if this is not possible, we will demand the ACA be amended by Congress.”

Earlier, President Obama had spoken to AFL-CIO head Richard Trumka, asking him to “soften the harshly worded resolutions that several unions planned to push” at the convention, according to the New York Times. Trumka agreed to do so, and “made sure to strip out some proposals that called for repealing the legislation.”

Unions worried about losing their lucrative middleman status

As a reminder, Taft-Hartley multi-employer plans consist of employer-sponsored health insurance that is arranged between a labor union in a particular industry, such as restaurants, and small employers in that sector. According to the National Coordinating Committee for Multiemployer Plans, approximately 26 million workers in the United States are covered under such arrangements today.

Last month, I discussed the real reason for unions’ concern about the Obamacare-driven demise of Taft-Hartley multi-employer health plans. One of the major reasons that people pay dues to unions is because unions do a great job negotiating health benefits for their members. If those members instead have the opportunity to shop for their own non-union-granted coverage on the Obamacare exchanges, workers have far less incentive to join unions. “This could be yet another existential threat to the unions,” said Paul Secunda, professor of labor law at Marquette University, to PolitiFact.

In addition, there can be little doubt that union members themselves—after having been asked by their leaders to support Obamacare and Democrats at the polls—are upset. Union leaders, feeling this political pressure, are stepping up their rhetoric. What they are asking for is not a “fix” of an Obamacare glitch; they are instead asking for special treatment so that subsidies, originally intended for the low-income uninsured, would also be available to union members who already have health insurance.

Congress has no plans to go along with union demands

Unfortunately for labor leaders, it doesn’t appear that Congress has any plans to amend Obamacare to allow union members with employer-sponsored coverage to take advantage of ACA subsidies on top of the long-time tax break for employer-sponsored health insurance.

Reps. Dave Camp (R., Mich.) and John Kline (R., Minn.), chairmen of the House Ways and Means Committee and the House Education and the Workforce Committee, respectively, have sent a letter to the directors of the Congressional Budget Office and the Joint Committee on Taxation, asking those agencies for an estimate of the cost of awarding Obamacare exchange subsidies to members of Taft-Hartley plans. They point out that the “statutory language of [the health law] clearly prohibits” such subsidies.

“In the more than three years since signing ObamaCare into law, President Obama has unilaterally granted waivers, special deals and delays to unions and other politically-favored friends,” said Rep. Camp in a statement. “This special treatment is unfair to the American families and individuals who are burdened with higher health costs and losing the insurance they have and like as a result of this law.”

Sen. John Thune (R., S.D.) has introduced an amendment called the “Union Bailout Prevention Act” that would explicitly prevent ACA subsidies from being directed to Taft-Hartley enrollees. In theory, such a bill isn’t necessary, given the fact that the ACA already bars this practice, but with the way this White House goes around Congress to change the way the law works, one can never be sure.

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