After playing a pivotal role in passing President Obama’s healthcare law in 2010, Big Labor now seems to be having buyers’ remorse. With the exchanges set to open October 1st, the law’s biggest supporters are now running in the opposite direction, trying to find a way out of the colossal train wreck that is ObamaCare. Labor unions are now realizing that the law they believed would help further their workers’ access to affordable healthcare will in fact have the opposite effect, thus diminishing their influence with members.
Businesses that previously provided healthcare to their employees are now being forced to eliminate healthcare coverage and/or cut the hours of many of their employees from full time to part time. What is to blame for this unfortunate pattern? Perhaps it’s the 20 new or higher taxes and increased regulatory burden that ObamaCare inflicts on businesses across the country.
To avoid the embarrassment of admitting that the law is a disaster, the AFL-CIO tried to secure subsidies for ObamaCare were but were rebuffed, triggering a panic over whether they will be able to survive the growing costs to businesses and healthcare under ObamaCare.
After being spurned by the President they helped re-elect, leaders are now facing a new reality. Joseph Nigro, president of the Sheet Metal, Air, Rail and Transportation Union said at last week’s AFL-CIO convention in Los Angeles, "I guarantee you by your next convention four years from now, you won’t meet a quarter of this room…We won’t be here."
Why are Union leaders like Joseph Nigro so concerned? Today unions use what are called “Taft-Hartley plans” to provide multi-employer healthcare to their members which are now in jeopardy. Since these union members are already insured, they will not be able to qualify for the same subsidies as uninsured individuals under ObamaCare. Unions point out that the dozens of new regulations and taxes actually make these plans more costly to union members and encourages employers with less than 50 employees to drop their employees’ healthcare plans. Since workers can actually get subsidized healthcare on exchange markets, this eliminates the workers’ needs for unions to negotiate healthcare benefits on behalf of their members.
Unions are also worried that due to the employer mandate, companies will continue to reduce the hours of employees and the amount of employees retained.
In a letter published in the Wall Street Journal, three prominent union presidents wrote:
"The unintended consequences of the ACA are severe,” they continue. “Perverse incentives are causing nightmare scenarios. First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits."