Affordable Care Act / Healthcare / Politics

Labor Unions: “We’re Not So Happy About Obamacare Anymore.”

They were one of the first and most fervent supporters of healthcare reform.

They formed the backbone of the coalition that drove Obamacare into law.

On July 12, James Hoffa of the Teamsters with 1.4 million members, Joseph Hansen of the Food and Commercial Workers with 1.3 million members, and several other union lobbies teamed up to write about the shortcomings of the Affordable Care Act (ACA). The union heads asked the President to use executive power as a backdoor fix to many concerns about part-time employment and special subsidies for multi-employer health insurance plans.


Part-time Employment

The ACA arbitrarily defined full time work to be 30 hours per week. This decision is having severe ramifications on job growth, and industries with low income and sporadic job opportunity. These industries include hospitality, restaurant franchises, and retail establishments.

Data from the Bureau of Labor Statistics shows that part-time employment decreased by about 6,000 jobs per month in 2010. This year, as the ACA is undergoing implementation, part-time employment has increased by an average rate of 93,000 jobs per month. In the meantime, the growth rate for full-time employment has dropped by 81.0%. In the United States, three quarters of a million jobs have been added to the economy since the start of the year according to a BLS’ Household survey. Nearly 74% of those jobs have been part-time employment opportunities!

Granted a lot of different fiscal policy and economic confidence factors are involved in these trends, but this CANNOT be a mere coincidence happening concurrently with the implementation of the ACA. Obamacare is clearly on the minds of small and larger business owners. This is particularly concerning for the unions. Union leadership and strength will be undermined when wages, health benefits, and hours are cut to economically survive the ACA’s mandates.

Multi-Employer Health Insurance Plans

Multi-employer or Taft-Hartley plans are essentially healthcare benefit plans arranged between a union and a specific industry. These jointly administered non-profit plans will not be eligible for subsidies from the federal government because workers under these plans will already have employer provided health coverage. This makes a unionized workforce unnecessarily expensive for employers, and is a direct attack on the power of unions.

Why do these plans even exist?

Under the Taft-Hartley Act of 1947, businesses and employers are able to jointly develop and contribute to non-profit healthcare trusts that provide continuous coverage over unemployment periods. Hoffa claims that these plans will be “relegated to second-class status,” and violate the Obama administration’s guarantee that those that like their health coverage can keep it.

The Wall Street Journal states, “ObamaCare’s financial structure encourages employers to quit the trusts when collective-bargaining contracts expire, and then dump the 20 million Americans with such coverage into the worse and more expensive government plans.”

Both of these complaints inevitably lower the power and influence of labor unions over Washington, which isn’t necessarily a bad thing. But both employment and multi-employer plan trends will shift more workers into the new insurance exchanges, likely resulting in higher costs and premiums.