Laborers’ O’Sullivan: Health Care Law Gives Non-Union Contractors ‘Unfair Competitive Advantage’

WASHINGTON—Add the Laborers to the list of unions who say the Obama administration’s health care law leaves multi-employer health care plans, and the union workers who depend on them, in the lurch.

Not only that, Laborers President Terry O’Sullivan said in an August 13 letter to the White House, the Affordable Care Act (ACA) gives non-union contractors “an unfair competitive advantage” over union shops.

O’Sullivan’s letter, also sent to Democratic congressional leaders, made the Laborers the latest union to raise questions about the administration’s implementation of the health care law and how it puts multi-employer plans – common in construction and present elsewhere – and their millions of members at a financial disadvantage.

The Roofers led the parade, several months ago, saying the ACA, the 2010 health care law, has so many problems it ought to be repealed.  More recently, the presidents of Unite Here, the Teamsters, the Electrical Workers and the United Food and Commercial Workers also complained about its impact and interpretation.  All the unions except the Laborers originally backed the ACA.

“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,” O’Sullivan wrote.

It “enables non-union contractors to avoid any cost for employee health insurance, giving them a grossly unfair competitive edge. ACA does not require them to provide 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 employer.”

That penalty applies only to firms with at least 50 employees, while 95% of construction contractors employ fewer than that, other unions have pointed out.

“The ACA encourages non-union contractors to send their employees to the new health exchanges for government-subsidized health insurance,” O’Sullivan said.  “In other words, non-union contractors’ employees get government-subsidized  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 problem, but it is absolutely unworkable.

“Moreover, it does not address the broader problem of ACA giving non-union contractors an unfair competitive advantage,” O’Sullivan states.  That tilts the playing field in favor of the non-union contractors, he adds.  The Obama administration has yet to respond to the unions’ concerns.


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