WSJ: ObamaCare implementation turning into a pretty big headache for Big Labor
posted at 8:41 pm on May 27, 2014 by Erika Johnsen
It wasn’t too long after they helped to ensure President Obama’s reelection that labor unions started to realize and subsequently express some buyer’s remorse on the Patient Protection and Affordable Care Act for which they also personally lobbied. They belatedly cautioned that ObamaCare’s requirements would have some adverse effects on the specific setups of their union-sponsored, multi-employer insurance plans, and while the administration eventually threw them a small bone late last year by exempting a handful of unions from a temporary reinsurance fee (and instead raising the cost of that fee for other insurees), it wasn’t nearly enough to fix the fundamental problem threatening their plans.
Now that unions are getting into the hard work of renegotiating labor contracts with employers, the WSJ notes that potentially major disputes over which party has to pay for the onerous new costs associated with ObamaCare are popping up all over the country:
Unions and employers are tussling over who will pick up the tab for new mandates, such as coverage for dependent children to age 26, as well as future costs, such as a tax on premium health plans starting in 2018. The question is poised to become a significant point of tension as tens of thousands of labor contracts covering millions of workers expire in the next several years, with ACA-related cost increases ranging from 5% to 12.5% in current talks.
In Philadelphia, disagreement over how much workers should contribute to such health-plan cost increases has stalled talks between the region’s transit system and its main union representing 5,000 workers as they try to renegotiate a contract that expired in March. …
Labor experts on both sides say the law doesn’t take into account that health benefits have been negotiated by employers and unions over decades, and that rewriting plans to meet new requirements can affect wages and other labor terms.
“It’s been a challenge for even some of the stronger unions to maintain the quality health plans that they have offered over the years,” said Daniel Murphy, an attorney in New York who represents employers in labor talks.
Neither employers nor unions struggling with declining national membership are likely to fall any deeper in love with the law after these negotiations are over, especially since the excellent healthcare offerings have traditionally been one of the prime attractors in joining a union in the first place.