White House Mulls ObamaCare Subsidies for Labor Unions

As union members and their leaders have become increasingly opposed to ObamaCare’s restrictions, the White House is reportedly considering a plan to offer health insurance subsidies--which were originally intended for the uninsured--to labor union members who already have employer-sponsored health insurance plans.

According to InsideHealthPolicy, the White House is working on regulations to address the unions’ concerns about Taft-Hartley plans:

Separately, the Office of Management and Budget previously showed on its regulatory review web site that on Aug. 24 it received a Department of Labor proposed rule on “Health Insurance Premium Assistance Trust Supporting the Purchase of Certain Individual Health Insurance Policies.” The rule, which OMB said is ACA-related, also appears to deal with the exclusion from a definition of an employee welfare benefit plan, but this week the description vanished.

Group health plans are employee welfare benefit plans that are established or maintained by an employer, by an employee organization such as a union, or both. The Labor department on Tuesday (Aug. 27) did not return requests for comment as to why the health insurance premium assistance trust proposed rule and description were taken down.

Multi-employer “Taft-Hartley” plans have tried to convince HHS that these plans should qualify as approved insurance plans in order to allow employees to obtain premium tax credits and cost-sharing reductions. Without subsidies, employers will be pressured to end their contributions.

As healthcare policy expert Avik Roy explains at Forbes:

Workers with employer-sponsored coverage don’t qualify for subsidized coverage on Obamacare’s insurance exchanges. Those subsidies are designed for low-income people who aren’t offered coverage from their employers, and have to shop for insurance on their own. But the labor union leaders want those subsidies to also apply to their members with employer-sponsored coverage, even though they already get those benefits tax-free due to the employer tax exclusion for health insurance.

Whether a union “fix” will work is still debatable. Rachana Dixit at InsideHealthPolicy wrote:

Democratic aides and sources off Capitol Hill say conversations about unions’ concerns are ongoing, and they say that the administration is working on regulations to address the issue. But, it is not clear if the proposed Department of Labor rule” would satisfy unions’ concerns.

“Separately, House Minority Leader Nancy Pelosi [D., Calif.] said to union members earlier this month that she was still working to resolve their concerns about the law, particularly on the Taft-Hartley plan issue,” Dixit wrote.

However, as Roy observes, this “concern” is not exactly an “issue,” but, rather, a matter of union leaders “seeking special treatment, and additional taxpayer subsidies, that other participants in employer-sponsored coverage don’t get.”

As Breitbart News reported Monday, 40,000 longshoremen have now quit the AFL-CIO because of the union’s support of ObamaCare’s confiscatory tax on their “Cadillac” healthcare plans.

In addition, a report from InsideHealthPolicy indicated that leaders of the Teamsters, United Food and Commercial Workers, and Unite HERE unions have slammed the Obama administration because their employees will be unable to access subsidies to purchase coverage for their “Taft-Hartley” multi-employer insurance plans.

In a letter to House Minority Leader Nancy Pelosi (D) and Senate Majority Leader Harry Reid (D) in July, the leaders wrote that ObamaCare 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.”

Roy notes, however, that the text of the Affordable Care Act (ObamaCare) is clear: coverage through an employer-sponsored health plan disqualifies subsidized coverage eligibility in a state exchange, “because you already get a subsidy through the tax code,” i.e., enrollees do not pay income or payroll taxes on the value of their health insurance coverage.

He concludes:

If, suddenly, the 20 million people on Taft-Hartley plans were eligible for subsidies, Obamacare’s costs would skyrocket.  If half of those Taft-Hartley enrollees gained $5,000 per year in tax credits along with their tax-free health benefits, we’re talking $50 billion a year in additional insurance subsidies for those individuals. That’s more than half a trillion dollars over ten years, accounting for health inflation.

I would say that it’s inconceivable that the White House would seek to impose such a “fix” to Obamacare without the consent of Congress. But, given the other changes that the administration has made to the health law—of similarly questionable legality—we can’t rule anything out.


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