By John Thune
U.S. Senator for South Dakota
Labor unions were among the biggest supporters of ObamaCare when the bill was being debated in 2010. After endorsing the bill and working fervently to pass the legislation, unions heralded the passage of the president’s signature law as monumental. Despite their support for the bill, the unions are now beginning to find out the ugly reality of what the law means for their members’ health care plans and they want out. Top union leaders have been quoted as saying that the law will “shatter” health benefits and cause “nightmare scenarios.” Terence O’Sullivan, president of the Laborers’ International Union of North America said, “If the Affordable Care Act is not fixed… then I believe it needs to be repealed.”
In September of 2013, media reports indicated that the White House was considering appeasing growing union concerns regarding ObamaCare by granting unions’ request for special ObamaCare premium tax subsidies for union members with health plans known as Taft-Hartley plans. This carve-out would have allowed union members to receive taxpayer-subsidized premium tax credits on top of generous plans that already receive the employer tax exclusion, forcing taxpayers to double-subsidize union members’ health plans. In order to prevent the White House from moving forward with this proposal, I introduced legislation to prevent the White House from making a special backroom deal for unions.
On October 30, 2013 and again on November 25, 2013, the Obama administration published regulations that seek to exempt these same Taft-Hartley plans from paying ObamaCare’s reinsurance tax. The reinsurance tax, which is scheduled to begin in 2014, was designed to provide funds to health care plans in the ObamaCare exchanges to help absorb the cost of care for people with pre-existing conditions. The tax is scheduled to raise a total of $25 billion by 2016. If unions are granted this special carve out by the president, the burden will be shifted to all other Americans in self-insured plans, requiring them to pay more to meet the amount of revenue required by law.
If the Obama administration exempts unions from this tax, they will be sending a clear message that unions are once again above the law under this administration’s regime. Unions should not be granted a special exemption just because the president fears further backlash on his signature law. To ensure that this is not allowed to happen, I introduced a bill that would prevent union health care plans from being exempted from the ObamaCare reinsurance tax. Rather than granting special backroom deals to political allies, the administration should support fairness for all by permanently delaying the law for every American. I will continue working with my colleagues in the Senate to ensure that we shield as many people as possible from the devastating impacts of ObamaCare and that all Americans are treated equal under the law.