AFL-CIO Realizes They Can't Keep Their Union Healthcare Plans Under Obamacare

The AFL-CIO approved a resolution saying that President Obama's health care overhaul will drive up the costs of union-sponsored health plans to the point that workers and employers are forced to abandon them.

In a strongly worded resolution released Wednesday, the federation said that labor unions still support the Affordable Care Act's overall goals of reducing health costs and bringing coverage to all Americans, but added that the law is being implemented in a way that is "highly disruptive" to union health care plans.

Some individual unions have complained about the law's impact for months, but the resolution marks the first time the nation's largest labor federation has gone on record embracing that view. Unions were among the most enthusiastic backers of the law when it passed in 2010.

“It still needs to be tweaked,” said Trumka, who pointed to the possibility that union members will lose their health insurance because of the inability of some union plans to qualify for federal tax subsidies.

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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 penalties.

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.