Unions’ Misgivings on Health Law Burst Into View

LOS ANGELES — When President Obama phoned the president of the A.F.L.-C.I.O. last month, he shared some news that the labor leader had long wanted to hear — the administration would propose measures to reduce workplace exposure to disease-causing silica dust.

But their conversation soon moved to what has become a contentious topic this summer: labor’s renewed anger over Mr. Obama’s health care law and decisions surrounding it, especially the postponement of an employer mandate to ensure coverage for workers and the potential effects of the coming health insurance exchanges on existing plans.

According to officials briefed on the call, the president voiced concern about labor’s criticisms, prompting the union federation’s leader, Richard Trumka, to promise that he would try to soften the harshly worded resolutions that several unions planned to push at this week’s A.F.L.-C.I.O. convention in Los Angeles.

Despite overtures on both sides — with Mr. Obama agreeing on the call to sit down with some union leaders to address their concerns at the White House, and Mr. Trumka initially hoping to quash such a public rift between the president and his party’s traditional allies — labor leaders criticized the administration and Congress on Wednesday at their convention.

While praising the overall legislation, the delegates overwhelmingly passed a sharply worded resolution that demanded changes to some of its regulations, although Mr. Trumka made sure to strip out some proposals that called for repealing the legislation.

At the convention, though, several labor leaders spoke their minds.

“If the Affordable Care Act is not fixed and it destroys the health and welfare funds that we have fought for and stand for, then I believe it needs to be repealed,” said Terence M. O’Sullivan, president of the Laborers’ International Union of North America. “We don’t want it to be repealed. We want it to be fixed, fixed, fixed.

“We’ve had our asses kicked on retirement security and we know our health funds are under siege,” he added. “We ask the president and Congress to do the right thing for the men and women we represent.”

The resolution asserts that the law, by offering tax credits to workers seeking insurance from for-profit and other companies in the exchanges, will place some responsible employers at a competitive disadvantage and destabilize the employment-based health care system.

The administration and health officials have repeatedly tried to assure critics that the legislation will not encourage companies to dump workers from employer-based plans into newly created health insurance exchanges, even if the employer-based coverage stands out as more generous and therefore more expensive for companies and even municipalities.

At the convention, Labor Secretary Thomas E. Perez’s cautious response to questions about the leaders’ concerns underscored how the complexities of the president’s signature domestic accomplishment and a longstanding goal of labor continue to present political difficulties for Mr. Obama.

In his speech before A.F.L.-C.I.O. members, Mr. Perez praised labor for helping enact the health law, but acknowledged that “challenges remain.”

During an interview here, he said, “The administration has been working to address questions and concerns raised by a wide array of stakeholders.”

Mr. Trumka declined to offer details about his telephone conversation with Mr. Obama, except to say: “We’re trying to solve problems.”

He and a group of union leaders also met late last month at the White House with Denis McDonough, the chief of staff, and Mr. Perez. Two other sessions have taken place since then with more junior administration officials, union officials said. The sit-down with Mr. Obama himself, Mr. Trumka and the union presidents is set for Friday.

Any erosion of health care benefits poses a singular threat to labor leaders, whose arsenal of tools to attract workers into union membership has dwindled alongside the decline of their organizations and their concomitant loss of influence around the country. Many unions and retirees have lost some benefits since the recession began, especially in the public sector as governments froze pension plans.

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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