Unions might dodge ObamaCare tax

Thinkstock

The labor movement appears likely to dodge a key tax under ObamaCare less than two months after the White House refused to make union plans eligible for subsidies.

The Obama administration indicated last week it will propose exempting certain self-insured, self-administered insurance plans from two of the healthcare law's three-year reinsurance fees.

ADVERTISEMENT
The policies that would escape the fees include the multi-employer or "Taft Hartley" plans that are commonly held by union members.

The disclosure, buried in rules released by the Health and Human Services (HHS) Department, would give unions some of the relief they have sought from ObamaCare.

"We also intend to propose in future rulemaking to exempt self-insured, self-administered plans from the requirement to make reinsurance contributions in 2015 and 2016," HHS said.

AFL-CIO President Richard Trumka told reporters on Wednesday that the labor federation is reviewing the proposal.

"We continue to work to address several problems that we have," Trumka said. "Part of the solution that has been offered doesn’t just apply to Taft-Hartleys. It applies to self-administered funds, whether they are Taft-Hartley or not. We are still reviewing all of that and we continue to try to make positive changes to the act."

Labor unions have become increasingly critical of the healthcare for threatening its health benefits, creating tensions with the administration.

The White House denied unions' main request in September for a wavier allowing multi-employer plans to receive the tax subsidies available on the new insurance exchanges.

President Obama and Vice President Biden met with union leaders at the White House after the waiver was denied.

But unions also sought to escape the reinsurance fee, and made that push a prominent part of the recent AFL-CIO convention, where members called for changes to the healthcare law.

The issue also came up during Congress's negotiations to reopen the government and raise the debt ceiling. Democrats at one point pushed the reinsurance exemption in the negotiations.

The reinsurance tax is meant to generate short-term revenue that will stabilize premiums on the individual market as sick patients enter the risk pool.

The tax applies to all group health plans, but unions say it will raise their healthcare costs while providing them no benefit.

According to HHS regulations, the administration only intends to exempt certain plans from the fee in 2015 and 2016. This would leave unions on the hook for payment in 2014, when the tax will be highest.

--This report was updated at 12:10 p.m.