The Obama administration is poised to give some labor unions a break from costly fees under the Affordable Care Act, a move that some say is calculated to placate a key White House ally.
In regulations published last week, the administration said it intends to propose rules that would exempt "certain self-insured, self-administered plans" from the requirement to pay the fees in 2015 and 2016. Health care experts say that could apply to some union-sponsored health plans, though it's unclear how many.
Utah Republican Sen. Orrin Hatch, ranking member on the Senate Finance Committee, said he's suspicious of the administration's motives.
"It certainly looks like the Obama administration is looking at a special deal for unions, which is deeply concerning given the problems that all Americans are facing due to Obamacare," Hatch said.
But in a conference call with reporters, AFL-CIO President Richard Trumka said the language does not single out the so-called union Taft-Hartley plans for special treatment.
"It applies to self-administered funds, whether they are Taft-Hartley or not," Trumka said. "We are still reviewing all of that, and we continue to try to make positive changes to the act."
Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues, said it would be "very unfair" to single out one group of employers who are contributing money and not let everybody out of it.
"All self-funded plans are in the same position of having to pay this three-year fee but getting no direct benefit in return," Young said.
She said hardly any employers in her group, which includes the nation's largest corporations, would benefit under the administration's language.
Fox News host Megyn Kelly discussed the proposed rules Wednesday with the Center for Union Facts' J. Justin Wilson, who said it could exempt unions up to $600 million in Obamacare-related fees.
President Barack Obama "is buying their silence with a $600 million dollar payback,” he said.
Wilson also claimed that businesses will most likely be left picking up the slack:
Labor leaders have long complained that Obamacare would drive up the cost of health care for union workers. In fact, in a July letter to Senate Majority Leader Harry Reid (D-Nev.) and Congresswoman Nancy Pelosi (D-Calif.), Teamsters chief James Hoffa, UFCW chief Joseph Hansen and UNITE-HERE chief Donald Taylor told the lawmakers that they needed to “fix” the health care law. There were even private meetings between labor leaders and senior White House officials to come to an agreement on the final cost of Obamacare on union workers.
However, even with the proposed breaks, labor officials still aren't totally satisfied, saying the language would not include most of their plans and doesn't address the wider changes they have requested.
The White House, for its part, continues to reject broader requests that union members in those plans be eligible for federal subsidies.
Unions and many businesses groups have also complained about the so-called reinsurance fees, which start next year at $63 per person for everyone who has coverage. The fee drops to about $40 a person in 2015 and even less the following year.
The temporary fee is designed to raise $25 billion over the next three years. The money collected is intended to provide a cushion for insurers from the initial hard-to-predict costs of covering previously uninsured people with medical problems. But unions and large employers argue that they shouldn't have to pay the fee because they won't benefit from the fund.
The Department of Health and Human Services said in a statement that once the rule is proposed the agency would consider comments from interested parties before moving forward.
The Associated Press contributed to this report.
(H/T: Weasel Zippers)
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