Although initially ardent supporters of the Affordable Care Act (ACA), several union leaders last week criticized certain features of the healthcare law, called for legislative changes, and expressed disappointment with the Obama administration’s responsiveness to labor concerns. While unions for months have voiced alarm over the ACA’s impact on multiemployer, union-sponsored health plans, their recent disapproval of the law coincides with Senate Majority Leader Harry Reid’s (D-NV) threat to change executive nominee confirmation rules – the so-called “nuclear option.” Employing this option would likely facilitate the appointments of Thomas Perez as Labor Secretary, and Mark Gaston Pearce, Sharon Block, Richard Griffin, Harry I. Johnson, III and Philip A. Miscimarra to be members of the NLRB – a result unions have been advocating. A move by top union officials to publicly criticize the administration at this time could be seen as an effort to encourage and expedite the confirmation process.
Union Criticism of ACA
Within the past week, several unions have made public declarations against various provisions of the ACA, particularly how the law affects union-sponsored, multiemployer health plans. Presidents of the International Brotherhood of Teamsters, United Food and Commercial Workers, and UNITE Here reportedly sent a letter to Sen. Reid and Rep. Nancy Pelosi (D-CA) explaining that certain portions of the healthcare law will make multiemployer plans, which are managed by labor and employer representatives, prohibitively expensive. Unions often tout their benefits as a marketing tool. As several unions have claimed, the ACA will result in more expensive plans, thereby making unionization less attractive, and possibly causing unionized employers to discontinue providing health insurance altogether. Among other things, unions are calling for their lower-income members to receive federal subsidies to help offset the rising cost of the union-sponsored plans. Currently, federal subsidies are available only to purchase health insurance through the future health exchanges for low-income employees who are unable to afford employer-provided insurance. Such federal funds are not available for employees covered under multiemployer plans.
As a result, according to International Brotherhood of Electrical Workers (IBEW) President Edwin D. Hill, “Businesses that did the right thing all along will be punished while employers who helped contribute to the health care crisis will be rewarded,” adding “It goes against the whole spirit of the legislation to begin with.” The IBEW even drafted a white paper and created an advertisement on how to “repair and reform” the ACA.
According to the IBEW, the ACA “threatens the viability of multiemployer health plans in four ways: 1) the high employee threshold of the employer mandate, 2) the reinsurance fee, 3) the definition of qualified health plans, and 4) the lack of multiemployer-specific administrative guidance. We believe it may be impossible to reverse the damage done to these plans if these issues are not resolved.”
Unions are also urging congressional leaders to increase the number of hours from 30 to 40 an employee would need to work to be considered “full-time” under the ACA’s employer responsibility (“pay-or-play”) provisions. Legislation that would make this change was recently introduced in the House and Senate.
Additionally, at least one union leader has expressed dismay at the administration’s decision to delay by one year the employer mandates, considering this grace period to be a business concession.
Nuclear Option and How it Would Benefit Labor
As previously discussed, changing the Senate rules would allow a simple (51 vote) majority to approve the NLRB and Labor Secretary nominations without the threat of a filibuster. Having operational leadership at the DOL and a fully-functioning NLRB would provide many benefits to organized labor. As Labor Secretary, Thomas Perez will likely implement the agency’s ambitious regulatory agenda, including the controversial persuader rule. A functioning NLRB will similarly pursue its agenda through Board decisions, policies, and regulations. With the continuing decline in private sector organized labor, unions would welcome this development.
The timing of the recent union ACA criticism could be viewed as a message that labor’s support of the administration is not unwavering.