Officials: Labor Making Progress in Talks with Administration Over Multi-Employer Health Plans

WASHINGTON—Organized labor is apparently making progress in convincing the Obama White House to revisit rules that would virtually trash multi-employer health care plans – joint employer-union run plans whose demise would throw 20 million people off of health insurance rolls.

That impression came from an interview AFL-CIO President Richard Trumka gave Dec. 19 to Mike Allen, White House bureau chief for Politico on a wide range of issues, and from talks with Trumka aides.  The interview is available on Politico’s website.  (See separate story on the overall interview.)

Trumka described the thorny problem of assuring the continuation of the multi-employer plans as one of several “tweaks” the 2010 Affordable Care Act needs.  He told Allen Congress might need to make the changes.  But he implied that virulent GOP hatred of the health care law makes legislative changes to the ACA unlikely soon.

The multi-employer plans cover workers in construction, food processing, retail food and other industries.  They’re arrangements where the union and management jointly run a health care plan, as opposed to having management contract with a private insurer or insurers to provide health care for workers.

But the ACA rules, as written by Obama’s Health and Human Services Department, treat the multi-employer plans the same way they treat the insurers, Trumka explained.  That means health insurance subsidies could go straight to low-income workers – but at a cost of forcing them to drop out of the plans’ coverage.

“If you have an existing plan that covers 500,000 people, you ought to be able to continue it,” Trumka told Allen.  But under the rules, the multi-employer plans might fail, leaving workers uncovered.  That raised the ire of a bloc of unions, speaking for their members, at the AFL-CIO convention in Los Angeles in September 2013.

“Our health care plans are really being treated unfairly,” Trumka told Allen.  “For everybody else, if you’re eligible for a (federal) health care subsidy, you get the subsidy.  They said ‘pay the worker.’  But if you’re a minimum wage worker and somebody says ‘Here’s 3,000 bucks, so you can buy health care’ or shoes for the kids, I’ll bet some of them will buy shoes for the kids.

“The second thing is that our employers pay into that trust fund” to cover workers with health care, he added.  “But to get the subsidy, those low-wage workers have to come out of the trust fund” and fend for themselves.

Meanwhile, the employers “are deemed to be not covering” their workers and are hit with fines “and on top of that they have to pay $63 per worker, even though they have the same health care plan we always had,” he said.

Labor is telling the Obama White House and its Department of Health and Human Services to pay the $3,000 subsidy to the trust fund that covers the workers, so firms won’t drop coverage and workers won’t be forced out, Trumka explained.

If the administration stands fast, the private insurers gain while the non-profit multi-employer plans lose and workers lose coverage, he warned.

Trumka predicted Congress would have to solve the multi-employer plan problem.  Some half a dozen union presidents, including James Hoffa of the Teamsters, Joe Hansen of the United Food and Commercial Workers and Ed Hill of IBEW have made that request to top congressional Democrats.  “We’ll continue to push on the Hill to make those changes,” Trumka told Allen.

Other union leaders have gone even farther.  Sheet Metal Workers President Joe Nigro warned at the AFL-CIO convention that demise of the multi-employer plans could lead to mass defections from labor’s ranks.  Laborers President Terry O’Sullivan declared that workers must not be sacrificed.

A Trumka aide informally told Press Associates Union News Service after the session that a huge legislative rewrite might not be needed to solve the multi-employer plans’ problem.  The White House has understood labor’s arguments on the issue and is seeking a solution, the aide added.  But not everything can be done administratively, leaving a smaller legislative fix necessary.  The aide was not specific.