Laborers' O'Sullivan calls for a fix to ACA's "destructive" impact on union health benefits
|The Laborers International Union of North America (LIUNA) was one of a
handful of unions that did not support the enactment of the Patient
Protection and Affordable Care Act (PPACA or ACA). LIUNA was concerned
that the law would have an adverse impact on the multiemployer plans on
which their members, retirees and families rely for health coverage. The
union was assured that their concerns would be addressed. These issues
are not yet resolved. Terry O'Sullivan, General President of LIUNA sent
this letter to the president, the vice president, Senate Majority Leader
Reid, and House Minority Leader Pelosi. LIUNA represents over 500,000
workers in the construction industry.
The letter by the president of LIUNA follows similar letters by the
presidents of the IBEW, IBT, UFCW, UNITE-HERE and the Roofers
July 18, 2013
President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500
Dear Mr. President:
ON BEHALF OF the Laborers' International Union of North America (LIUNA), I
am compelled to express our concerns over the destructive consequences of
the Patient Protection and Affordable Care Act (PPACA) for multiemployer
health and welfare funds. During the drafting and Congressional enactment
of this law, LIUNA raised serious concerns that our Union had with aspects
of the law and its impacts on the health insurance system that has served
millions of hard working Americans and their families over the last forty
years. Many of the objections we raised were dismissed out of hand or, we
were assured, would be addressed later as the law was implemented.
Unfortunately, policymakers do not seem to appreciate these non-profit,
labor-management trust funds that have been providing medical,
hospitalization and other health benefits to our members, retirees, and
their families for generations. Were it not for these funds, most of
LIUNA's members and families would have lacked health care coverage
because of the mobile work patterns in the building and construction
industry. These benefits have been gained over the decades through
self-help. The funds are simply pools of workers' money funded by
collectively bargained contributions that are wage substitutes.
During the legislative process that led to the enactment of the law, it
was clear that the unique nature of the multi-employer plans was poorly
understood by the Congress and the Administration. We were assured that
our plans would not be adversely affected by the law and that as the law
was implemented the issues unique to our universe would be addressed.
As you are well aware, because of our concerns over the impact the PPACA
would have on the members of our Union and their families, the Laborers
were one of a few handful of unions that did not support enactment of the
law. Now, we have watched as the implementation of the law has progressed,
our fears have become reality. Instead of working to assure that these
insurance pools can continue to provide health care for the workers they
serve, administrative decisions have compounded the problem.
The recent announcement by the Department of Treasury that the
Administration will provide an additional year before the ACA mandatory
employer and insurer reporting requirements begin, along with a delay in
the required "employer shared responsibility payments", only makes this
unfair treatment worse. It is bad enough that the employer mandate only
applies to companies with more than 50 employees, which excludes most of
the construction industry, but now larger "low road" employers are being
given an extra year to continue their efforts to subvert the law.
The ACA imposes substantially higher costs on multi-employer funds and
union members, while enabling non-union employers to continue escaping
responsibility and shift their employees' health insurance costs to the
taxpayers. The law enables non-union contractors to avoid any cost for
their employee health insurance, giving them a grossly unfair competitive
edge. ACA does not require them to provide health insurance coverage for
their employees. There is a "free rider penalty", but even that small
amount applies only to "large employers" and can be easily evaded by any
The ACA encourages non-union contractors to send their employees to the
new Health Exchanges for Government-subsidized health insurance.
Underscoring the unfairness, the Administration is interpreting ACA as
preventing union members with health and welfare fund coverage from
receiving Government subsidies for that coverage, even if they meet all of
the subsidy eligibility standards.
In other words, non-union contractors' employees get Government-subsidized
health insurance coverage, and union members get to pay for their own
coverage through collectively bargained contributions to health and
welfare funds. A complicated "two trust solution" has been devised to
supposedly correct this subsidy problem, but it is absolutely unworkable.
Moreover, it does not address the broader problem of ACA giving non-union
contractors an unfair competitive advantage. Our unions are committed to
seeing the playing field leveled between the union and non-union sectors
of the construction industry.
Health and welfare funds' costs are increasing because of various benefit
mandates and regulatory requirements unnecessarily imposed on the funds.
But even more outrageous is ACA's taxes on funds. The so-called temporary
reinsurance tax alone will cost every health and welfare fund $63.00 per
covered life for just 2014, for a fund covering 10,000 lives (members and
dependents), the tax will be $630,000.00.
The proceeds of this tax will be used by the Government to subsidize
insurance companies offering health plans in the Health Exchanges. In
effect, ACA takes money from the pocket of each laborer covered by a
health and welfare fund and gives it to forprofit insurance companies. The
worker gets nothing in return. That is offensive and inexcusable.
At what point will responsible behavior be rewarded?
ACA's costs will inevitably require increases in collectively bargained
contribution rates for health and welfare. This puts more pressure on the
total wage package for members. In a competitive environment, higher labor
costs generally means fewer jobs.
In short, for unionized construction workers, their employers, and their
health and welfare funds, the ACA is proving to be a destructive program
that was supposed to control health care costs as was promised.
Approximately, 3 million laborers, retirees, and their families now face
the very real prospect of losing their health benefits. This, I must
remind you, was something that you promised would not happen.
We believe that there are opportunities that the Administration can take
to help alleviate some of the impacts that the law is having on our health
care plans. We hope that you will work with us to see that these common
sense changes are implemented.
With kind regards, I am
Vice President Joe Biden
Senate Majority Leader Harry Reid
House Democratic Leader Nancy Pelosi
All Unions Committee for Single Payer Health Care--HR 676
c/o Nurses Professional Organization (NPO)
1169 Eastern Parkway, Suite 2218
Louisville, KY 40217
(502) 636 1551
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