Thursday, July 18, 2013

Fwd: qotd: Union leaders: Taft-Hartley plans at risk under ACA

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-------- Original Message --------
Subject: qotd: Union leaders: Taft-Hartley plans at risk under ACA
Date: Thu, 18 Jul 2013 09:19:16 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The Wall Street Journal
July 12, 2013
Union Letter: Obamacare Will 'Destroy The Very Health and Wellbeing' of
By Tom Gara

The leaders of three major U.S. unions, including the highly influential
Teamsters, have sent a scathing letter to Democratic leaders in
Congress, warning that unless changes are made, President Obama's health
care reform plan will "destroy the foundation of the 40 hour work week
that is the backbone of the American middle class."

The full letter, below:


Dear Leader Reid and Leader Pelosi:

When you and the President sought our support for the Affordable Care
Act (ACA), you pledged that if we liked the health plans we have now, we
could keep them. Sadly, that promise is under threat. Right now, unless
you and the Obama Administration enact an equitable fix, the ACA will
shatter not only our hard-earned health benefits, but destroy the
foundation of the 40 hour work week that is the backbone of the American
middle class.

Like millions of other Americans, our members are front-line workers in
the American economy. We have been strong supporters of the notion that
all Americans should have access to quality, affordable health care. We
have also been strong supporters of you. In campaign after campaign we
have put boots on the ground, gone door-to-door to get out the vote, run
phone banks and raised money to secure this vision.

Now this vision has come back to haunt us.

Since the ACA was enacted, we have been bringing our deep concerns to
the Administration, seeking reasonable regulatory interpretations to the
statute that would help prevent the destruction of non-profit health
plans. As you both know first-hand, our persuasive arguments have been
disregarded and met with a stone wall by the White House and the
pertinent agencies. This is especially stinging because other
stakeholders have repeatedly received successful interpretations for
their respective grievances. Most disconcerting of course is last week's
huge accommodation for the employer community—extending the statutorily
mandated "December 31, 2013" deadline for the employer mandate and

Time is running out: Congress wrote this law; we voted for you. We have
a problem; you need to fix it. The unintended consequences of the ACA
are severe. Perverse incentives are already creating nightmare scenarios:

First, the law creates an incentive for employers to keep employees'
work hours below 30 hours a week. Numerous employers have begun to cut
workers' hours to avoid this obligation, and many of them are doing so
openly. The impact is two-fold: fewer hours means less pay while also
losing our current health benefits.

Second, millions of Americans are covered by non-profit health insurance
plans like the ones in which most of our members participate. These
non-profit plans are governed jointly by unions and companies under the
Taft-Hartley Act. Our health plans have been built over decades by
working men and women. Under the ACA as interpreted by the
Administration, our employees will treated differently and not be
eligible for subsidies afforded other citizens. As such, many employees
will be relegated to second-class status and shut out of the help the
law offers to for-profit insurance plans.

And finally, even though non-profit plans like ours won't receive the
same subsidies as for-profit plans, they'll be taxed to pay for those
subsidies. Taken together, these restrictions will make non-profit plans
like ours unsustainable, and will undermine the health-care market of
viable alternatives to the big health insurance companies.

On behalf of the millions of working men and women we represent and the
families they support, we can no longer stand silent in the face of
elements of the Affordable Care Act that will destroy the very health
and wellbeing of our members along with millions of other hardworking

We believe that there are common-sense corrections that can be made
within the existing statute that will allow our members to continue to
keep their current health plans and benefits just as you and the
President pledged. Unless changes are made, however, that promise is hollow.

We continue to stand behind real health care reform, but the law as it
stands will hurt millions of Americans including the members of our
respective unions.

We are looking to you to make sure these changes are made.

James P. Hoffa
General President
International Brotherhood of Teamsters

Joseph Hansen
International President

D. Taylor

Comment: The Affordable Care Act (ACA) was intended to keep insurance
obtained through employment intact, while adding coverage for the
uninsured through new state insurance exchanges and through an expansion
of Medicaid. Among the programs to be protected were the multi-employer
Taft-Hartley plans that were collectively bargained between unions and
employers. Yet an unintended consequence of ACA seems to have put these
plans at risk.

Why? The provision of ACA that exempts employers from a requirement of
providing coverage for part-time workers - those working less than 30
hours per week - has provided an opportunity for employers to escape the
burden of their health benefit programs by merely rearranging the work
schedules of their employees. It is already happening even though the
employer requirement does not go into effect for another one and a half

Employers can assuage their guilt to some extent since they know that
the government will subsidize the plans when their newly part-time
employees switch to the insurance exchanges. These subsidies are not
available for the Taft-Hartley plans (though employers are able to
deduct from taxable revenues the cost of these plans - a tax expenditure).

Another motivation for employers to attempt to reduce the Taft-Hartley
plans is that ACA includes a tax to be assessed against so-called
Cadillac plans. Little does it matter that these are not plans with some
kind of gilded benefits. These are merely standard health plans that
have not had benefits stripped out nor have they shifted excessive costs
to patients through higher deductibles and other forms of cost sharing.
Yet health care costs are now so high that the cost of the standard
benefits offered exceed the Cadillac threshold.

Union members gave up major wage increases in order to have secure
health care coverage. If they lose their Taft-Hartley plans, it is
unlikely that employers would grant the wage increases that they would
have received had they not had to spend so much on the health plans,
even though economists consider these plans to be paid for by forgone
wage increases. The reality is that the economic model we have today
transfers much of the productivity of the workers to the wealthiest one
percent of our society.

Taft-Hartley was designed as anti-union legislation, though allowing
collectively-bargained health benefit programs. Now even those programs
are at risk. The anti-union one-percenters are winning the war.

We should remove responsibility of providing health benefits from the
employers, but not in a way that shafts their employees. We need to
replace our current dysfunctional health care financing system with one
that works for everyone, while sharing the costs equitably - a single
payer national health program. The solution is so obvious. Why isn't it
catching on?

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