Administration rejects labor's request for ObamaCare fix (Video)

The Obama administration on Friday denied a request from labor unions to have their healthcare plans receive tax subsidies under ObamaCare.

A White House official said the Treasury Department has determined that the healthcare plans used by many union members — known as multi-employer or Taft-Hartley plans — cannot be made eligible for subsidies that are intended to help uninsured people afford coverage.

ADVERTISEMENT
“The Treasury Department issued a letter today making clear that it does not see a legal way for individuals in multi-employer group health plans to receive individual market tax credits as well as the favorable tax treatment associated with employer-provided health insurance at the same time,” the official said.

Nevertheless, the administration said it plans to work with unions to make sure members can obtain coverage through the new insurance exchanges.

“The administration will work with multi-employer plans and other non-profit plans and encourage them to offer coverage through the Marketplace, on an equal footing, to create new, high-quality, affordable options for all Americans,” said the official.

The rejection of labor’s request was announced after President Obama and Vice President Biden sat down at the White House with labor leaders.

Labor officials attending that meeting included AFL-CIO President Richard Trumka, Unite Here President D. Taylor and United Food and Commercial Workers President Joe Hansen. Labor Secretary Tom Perez, White House Chief of Staff Denis McDonough and Valerie Jarrett, a senior adviser to Obama, were also in the session.

Trumka told reporters he was hoping for "a solution" in the meeting, but repeatedly refused to answer questions about what labor officials asked for.

When a reporter inquired about Trumka's No. 1 ask, he quipped, “for you guys to stop following me,” then left the White House grounds.

Labor’s grievances with ObamaCare exploded into the open this week as officials adopted a resolution harshly critical of the law at the annual AFL-CIO convention.

Union officials said they are worried that employers will kick their members off the multi-employer plans and force them instead into the insurance exchanges, which begin enrollment on Oct. 1.

Union leaders said they were under the impression that the White House didn’t want them to move forward on the resolution, which echoed Republican criticisms of the law.

Labor unions have been staunch allies of Obama, spending millions of dollars in support of his two White House campaigns.

When Obama announced earlier this summer that the healthcare law's insurance mandate for employers would be delayed for one year, unions began to lobby openly for ther multi-employer plans to qualify for subsidies under ObamaCare, even though they already receive a subsidy in the form of tax breaks.

Republicans sought to block such a move. Sen. John Thune (R-S.D.) offered legislation this week to deny the union health plans from receiving the subsidies.

It appears that Thune's legislation is now moot, as the White House has decided it does not have the legal authority to pursue the ObamaCare change.

In a statement Friday, Randi Weingarten, president of the American Federation of Teachers, said her union will look to "fix" the healthcare law's problems.

"It was not the intent of the ACA to jeopardize the healthcare benefits that many working people and their families have as a result of collective bargaining agreements between unions and their members and their employers," Weingarten said.

"Our intent is to fix the ACA. Our goal remains the ACA’s goal: affordable, high-quality healthcare coverage for all. We know the administration shares that goal and we look forward to working together to make the promise of the Affordable Care Act a reality for all Americans.”

— This story was updated at 7:12 p.m.