How Does Obamacare Affect Union Workers?

Obamacare, or the Affordable Care Act (ACA), was intended to extend affordable health insurance coverage to millions of uninsured Americans, and it has done just that. Citizens previously unable to obtain health insurance due to preexisting conditions or low income now have access to coverage, including preventive and emergency care.

The plan also made it mandatory for U.S. citizens to carry health insurance, making every American responsible for his or her own health and welfare, in a sense. On the upside, insurance providers were also charged with maintaining mandatory minimum standards for essential health coverage, meaning that access to certain types of coverage would be available to everyone.

In addition to helping uninsured Americans gain coverage, Obamacare also had a number of effects on those already insured. In many cases, the results were positive, increasing coverage and possibly lowering costs. One group affected by the changes was union workers.

So how have union workers been affected by Obamacare?

Union Coverage
In union work, whereby workers receive insurance coverage from their union rather than through an employer, per se, there is a complex relationship between hours worked, money paid toward union health coverage, and whether or not union workers are covered. Unions use collective bargaining power to gain greater benefits for members, but members must qualify for this coverage based on hours worked.

Under Obamacare, there are new rules and regulations regarding the level of coverage every citizen must maintain to avoid penalty, as well as employer responsibilities based on the number of full-time employees, mandatory minimums for coverage, and providing affordable options. Unions, however, are a little different.

Unions are not employers. They collect fees from members and use the collective bargaining power provided by their many members to negotiate for health benefits. Further, many unions use the Taft-Hartley law to create self-funded plans that includes multiple employers.

However, bargaining revolves around negotiating rates for employers rather than necessarily negotiating for specific benefits. This means that both payments and benefits could differ from one employer to the next.

In addition, it’s important to note these plans have been exempt from state insurance laws (as they may operate in several states). Under the ACA, many of the ways unions work to provide health insurance benefits to union members are being challenged.

Cadillac Tax
The Cadillac Tax is aimed at self-funded plans, like the ones many unions employ. It is set to take effect in 2018 (although unions are fighting to stop it altogether) and it is an excise tax designed to penalize organizations that aren’t offering affordable healthcare options to workers.

The problem for unions, especially those that negotiate multi-employer plans, is that not all workers are guaranteed coverage. This could cause major issues for workers that pay into a plan and then find themselves lacking sufficient coverage to comply with the federal mandate for minimum coverage.

ACA penalties like the Cadillac Tax are designed to ensure that union workers have access to affordable policies that meet the minimum standards. In other words, unions rather than union workers will be the ones to suffer for failure to comply with laws. In many ways, this is good news for union workers, who will not only be able to meet their obligations under Obamacare, but will also potentially enjoy greater benefits at lower rates.