Bill Would Block ACA Tax Subsidies for Certain Union Health Plans

On Monday, Sen. John Thune (R-S.D.) introduced legislation -- called the Union Bailout Prevention Act -- that would bar the Obama administration from providing federal tax subsidies to labor union members in "Taft-Hartley" health plans, which do not meet coverage standards under the Affordable Care Act, the Washington Times reports (Howell, Washington Times, 9/9).

Under such not-for-profit multi-employer health plans, unions and employers collaborate and contribute to the cost of coverage. As many as 20 million workers -- from high-wage construction workers to low-wage restaurant workers -- are enrolled in the plans (California Healthline, 9/4).

In July, leaders of several unions wrote letters to President Obama and House and Senate Democrats about their concerns with a provision in the ACA that does not consider Taft-Hartley health plans as qualified health plans, making them ineligible for tax subsidies (Bogardus, The Hill, 9/2).

The unions argue that without the subsidies, employers will have a greater incentive to scale back employees' work hours, drop health coverage and force employees into the law's insurance exchanges. Although the Obama administration has pledged to make the ACA work for people enrolled in Taft-Hartley plans, it has not proposed any changes that would address the unions' concerns (California Healthline, 9/4).

Obama was scheduled to deliver a speech -- and address the issue over the Taft-Hartley plans -- at the AFL-CIO's annual conference in Los Angeles, but canceled his speech to work on his administration's military plans relating to Syria. The AFL-CIO is particularly frustrated that religious and business interests have received exceptions to the ACA while its concerns have not yet been addressed, The Hill's "Healthwatch" reports.

Thune's Proposal Would Prevent Administration From ACA Union Fix

In a statement, Thune said union "leaders are now awakening to the ugly reality of" the ACA, and "[n]ow that the full consequences ... are nearing, these same union leaders are seeking a special backroom deal from the White House" ("Healthwatch," The Hill, 9/9). He added, "Rather than take hard-earned money from taxpayers to subsidize union health care plans, the Obama administration should give all Americans a break by permanently delaying" the ACA (Washington Times, 9/9).

According to "Healthwatch," Republicans feel that allowing the multi-employer plans to qualify for subsidies would give unions an unfair exception from what critics believe are the law's negative consequences ("Healthwatch," The Hill, 9/9).

Last week, Reps. Dave Camp (R-Mich.) and John Kline (R-Minn.) asked the Congressional Budget Office and the Joint Committee on Taxation to provide a cost estimate for altering the ACA regulation to allow labor unions to continue offering Taft-Hartley health plans, along with a legal analysis of whether the union plans should be eligible for the subsidies (Baker, "Healthwatch," The Hill, 9/5).