Why labor unions are down on ObamaCare
After providing crucial support for the Affordable Care Act, unions have started changing their tune.
Last month, leaders from three powerful unions wrote in a letter to Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) that ObamaCare would "shatter not only our hard-earned health benefits, but destroy the foundation of the 40-hour workweek that is the back bone of America."
Their complaint? That ObamaCare is to blame for employers hiring more part-time workers — specifically, a deferred provision that would require employers with 50 employees or more to provide all their full-time workers with health care coverage. (Not everyone subscribes to this theory.)
"Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly," they wrote. "The impact is two-fold: fewer hours means less pay while also losing our current health benefits."
Furthermore, the letter lamented the impact ObamaCare would have on multi-employer, non-profit health plans, which feature benefits arranged between a union in a particular industry and small employers in that industry. Under ObamaCare, employees under such plans, known as Taft-Harley plans, would not receive subsidies that are available in other plans, while being taxed at the same rate. Twenty million workers are covered by Taft-Harley plans, says Forbes.
Finally, unions are also unhappy about the so-called Cadillac tax, a provision that will levy a hefty tax on the most expensive plans. Starting in 2018, plans that cost more than $10,200 for individuals and $27,500 for families will be taxed 40 percent for each dollar they go above that threshold.
The rule is meant to get employers to lower costs, a grand goal of ObamaCare that will theoretically make the country's health spending sustainable. "But it also infuriates workers," says Ezra Klein at The Washington Post, "and, in some cases, the unions that represent them."
After all, they’re getting something for all that health-care spending. Their plans feature vast networks, low out-of-pockets costs, and much else. Some of that will be ratcheted back. [The Washington Post]
This is also going to be a problem for state and local government workers, whose benefits are negotiated by unions.
"Cities including New York and Boston, and school districts from Westchester County, N.Y., to Orange County, Calif., are warning unions that if they cannot figure out how to rein in health care costs now, the price when the tax goes into effect will be steep, threatening raises and even jobs," says The New York Times.