When Laborers’ International Union President Terry O’Sullivan took the AFL-CIO convention podium in September, he voiced a majority view that, “If the Affordable Care Act is not fixed, and it destroys the health and welfare funds that we have all fought for and stand for, then I believe it needs to be repealed.” White House meetings on the subject had not paid off, it seemed. According to Forbes magazine, the President had to intervene to forestall, barely, a convention resolution to repeal the ACA.
Generous, employer-paid health care coverage has been a chief attractant for low wage, non-union workers. Especially in the construction and transportation industries, much of that coverage has been provided through labor-management health and welfare trust funds, many of which are similar to self-insured, employer group health plans. Those funds are threatened by three ACA features: (1) beneficiary ineligibility for subsidies that would accompany their purchase of plans through the ACA Marketplace; (2) the coming “Cadillac plan” tax; and (3) other fees and taxes already imposed on insurance issuers and plan sponsors, most especially the annual reinsurance fee of $5.25 per month per covered life. So far, the Administration has not formally promised union funds any associated relief, despite heavy lobbying.
On October 30, 2013, HHS published a sixty page final rule with a title twenty-nine words long. As usual, the rule’s preamble dwarfs the appended regulation text. Six pages deep, at the bottom of the preamble’s center column, this sentence appears: “We also intend to propose in future rulemaking to exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for the 2015 and 216 benefit years.”
This is the same way that HHS announced that it would require little or no Exchange verification of applicant income or residency – i.e., by burial deep within a regulatory preamble. It’s the same way that HHS originally announced that some who enroll in an Exchange plan late in the open enrollment period will owe a partial year individual mandate penalty. In short, this is how HHS often breaks controversial regulatory news.
We won’t know until we read the future rule’s preamble whether union health and welfare funds are getting the relief that they have demanded, and on what statutory authority they might be granted selective relief from fees to be enforced against other plans. But whatever the merits of policy or politics, employers who contribute to such funds stand to benefit from this relief, and should welcome this news, if we have taken this hint correctly.