Treasury rejects labor unions’ demand for modifications to Affordable Care Act

By Barbara Cotter, Attorney at Law

Labor unions which once supported the Affordable Care Act now complain that it will irreparably harm their multi-employer health plans.  They have demanded regulatory action this year, before the new health insurance exchanges open for business. At issue are the health care subsidies available to those individuals who earn up to four times the federal poverty line.  Under the Affordable Care Act, those subsidies are triggered when an individual who does not have adequate employer-sponsored coverage seeks insurance from an exchange.   Because union members generally receive  the minimally mandated level of coverage through a multi-employer plan, they cannot obtain such subsidized coverage.

Unions have been pressing for regulations to extend the subsidies to individuals who obtain health coverage from a multi-employer health plan, in addition to the exchanges.  They predict that absent regulatory change, employers will attempt to drop multi-employer plan coverage when union contracts are renegotiated so that employees have access to the subsidies.

Last week, however, the Treasury Department indicated that regulatory relief is unlikely.  In a September 13, 2013 to the Senate Finance Committee, it stated that the Affordable Care Act unequivocally limits the availability of subsidies, and individuals receiving adequate coverage from multi-employer plans are not eligible for them.  Further wrangling over this aspect of the Affordable Care Act is likely.






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