The Obama administration on Friday said it cannot legally grant federal tax subsidies to union workers who are covered under multiemployer benefit plans, the New York Times reports (Pear, New York Times, 9/13).
The announcement came following a meeting between White House officials and several labor union representatives, who in recent weeks have expressed concern about the types of benefits that union workers will receive under the Affordable Care Act (Rampton, Reuters, 9/13).
Background on Issue
In July, leaders of several unions wrote letters to President Obama and House and Senate Democrats about their concerns with a provision in the ACA that does not consider so-called Taft-Hartley health plans -- which do not meet the law's coverage standards -- as qualified health plans, making them ineligible for tax subsidies.
Under such plans, unions and employers collaborate and contribute to the cost of coverage. As many as 20 million workers -- from high-wage construction workers to low-wage restaurant workers -- are enrolled in the plans. The unions argue that without the subsidies, employers will have a greater incentive to scale back employees' work hours, drop health coverage and force employees into the law's insurance exchanges (California Healthline, 9/10).
In a letter sent Friday to Rep. Dave Camp (R-Mich.) and Sen. Orrin Hatch (R-Utah), the Treasury Department highlighted the administration's denial of the unions' request to issue regulations altering what they characterized as an oversight in the ACA, the Wall Street Journal reports.
A White House statement reiterated the decision, noting that the administration "does not see a legal way for individuals in multiemployer group health plans to receive" tax credits while enrolled in plans that already receive favorable tax treatment.
However, the administration pledged to continue to "work with multiemployer plans and other [not-for-profit] plans and encourage them to offer coverage through the marketplace" (Trottman, Wall Street Journal, 9/13).
Meanwhile, Sen. John Thune (R-S.D.) has introduced legislation that would prohibit the administration from providing federal tax subsidies to labor union members, arguing that "union leaders are seeking a special backroom deal from the White House."
In addition, two GOP lawmakers are seeking a cost estimate for revising the ACA in order to allow labor unions to continue offering Taft-Hartley health plans (California Healthline, 9/10).
Rep. Black Introduces Bill To Stop ACA Labor Fix
In related news, Rep. Diane Black (R-Tenn.) on Thursday introduced a bill (HR 3093) that would prevent individuals who receive health coverage as part of collective bargaining agreements from receiving tax subsidies under the ACA, The Hill's "Floor Action Blog" reports.
Black's bill -- which already has six co-sponsors -- was introduced as the House companion to Thune's measure (Kasperowicz, "Floor Action Blog," The Hill, 9/13).