Obama Administration Poised to Exempt Unions From ObamaCare Tax

By:  Michael Tennant
11/12/2013
       
Obama Administration Poised to Exempt Unions From ObamaCare Tax

In a recent regulation announcement, the Obama administration quietly let it be known that it plans to exempt labor unions from an ObamaCare tax on health insurance.

Labor unions, longtime supporters of the Democratic Party, have been clamoring for changes to ObamaCare for months, and now it appears that they will get at least one of their wishes: an exemption from a tax on health insurance.

On October 30, the Department of Health and Human Services (HHS) published a typically wordy final rule whose even longer preamble included the following sentence: “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 2016 benefit years.”

Quietly sneaking proposals into preambles that few read “is how HHS often breaks controversial regulatory news,” wrote benefits lawyer R. Pepper Crutcher, Jr.

The most obvious point of controversy is that the rule exempts certain insurance plans, but not others, from the insurance tax (or “fee” in ObamaCare lingo) that takes effect next year. That tax will come to $63 per covered person in 2014, $42 per person in 2015, and $26 per person in 2016, after which it is scheduled to end.

Moreover, when one examines which plans would be exempt under the regulation, it becomes clear that one and only one entity stands to reap huge gains from it: Big Labor.

‘‘We were really scratching our heads about who actually benefits from this,’’ health insurance compliance attorney Ed Fensholt told the Associated Press. ‘‘It certainly isn’t aimed at employers because employers don’t really self-administer their plans.’’

Many unions, on the other hand, do. A significant number of union members belong to multiemployer health plans, also called Taft-Hartley plans. “Bargained by unions and jointly administered with employers,” explained Labor Notes, such plans “cover members and families not just while they are working intermittently but through periods of unemployment and even during retirement. They provide the same coverage for everyone, regardless of age, family status, or health status.” In other words, they’re a very good deal for union members.

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Photo is of President Obama and Democrats cheering the passage of ObamaCare

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