Over the past year, labor unions have been seeking exemptions from aspects of the Patient Protection and Affordable Care Act (often called “Obamacare”).  In recent months, unions have asked President Obama’s administration and Democrat leaders in Congress to provide union-employees, who have employer-provided health insurance plans, the same Obamacare Exchange subsidies given to Americans who do not have employer-provided insurance. 

Unions have also asked to be exempted from the reinsurance fees that were created by Obamacare.  The reinsurance starts in 2014 and requires all self-insured companies to pay a tax for each person covered under their health care plan. For 2014, the reinsurance fee set by the government is $63 per person. The tax was designed to help insurance companies operating in the Obamacare Exchanges to cover unexpected costs.  

Nonpartisan analysis shows that the law is encouraging employers to reduce workers’ hours, cut jobs, and shift the increased costs of health insurance to workers.  While Dr. Coburn shares the concerns that Obamacare is reducing workers’ hours and increasing the cost of health insurance, these burdens are being felt by tens of millions of American—union workers and non-union workers alike. Dr. Coburn does not believe unions – who supported Obamacare’s passage – should be given special exemptions from Obamacare while other Americans are forced to comply with all aspects of this unworkable, unaffordable, and unfair law.

On September 18, 2013, Dr. Coburn, along with other senators, warned President Obama’s director for the Office of Management and Budget that the Administration should not unlawfully allow taxpayer-funded Obamacare subsidies to be given to workers in union-sponsored health insurance plans.  As the letter explained, under the law, these subsidies are only allowed to be provided to consumers who purchase health coverage through the Exchanges and who do not have employer-provided coverage.  Individuals with employer-provided insurance are ineligible for these subsidies, and an exception should not be provided for individuals with multiemployer (union) plans.  

The Administration responded to Dr. Coburn’s letter to say that they do not intend to provide these Exchange subsidies through the authority of the Internal Revenue Service. However, they have not yet clarified whether or not an exception may be given through the authorities of the U.S. Department of Labor. 

On November 14, 2013, Dr. Coburn joined other Senators in sending a letter to the Director of the Office of Management and Budget regarding our opposition to a proposed rule to provide unions an exemption from the reinsurance fee.   While this fee is costly for the 26 million Americans with health benefits through unions, this tax also burdens nearly 170 million Americans with employer-sponsored health insurance.  Dr. Coburn believes this tax on health insurance should be removed, but does not believe anyone should receive special treatment. All Americans should receive the same consideration from President Obama’s Administration. 

On November 19, 2013, Dr. Coburn joined 10 other Senators in introducing the Union Tax Fairness Act (S. 1724). This bill would prevent union health care plans, known as Taft-Hartley plans, from being exempted from the ObamaCare reinsurance tax. 

Dr. Coburn will continue his efforts to delay, dismantle, and disarm Obamacare’s negative impact on Americans’ health care.  However, in the process, all Americans must be treated equally under the law and as a matter of fairness, unions should not receive special exemptions that do not apply to all Americans. 

Supplementary Materials:

• 1/30/2013— Read the Wall Street Journal article highlighting union efforts to secure exemptions from the ACA here: http://on.wsj.com/15SoeSQ.
• 2/7/2013—Senators write to President Obama opposing unlawful expansion of subsidies to union health insurance plans. Read the letter here: http://1.usa.gov/12z7X1U.
• 9/13/2013—President Obama’s Administration responds that premium subsidies will not be given to union members for employer-sponsored health insurance through IRS, but leaves door open for exemption through the Department of Labor (DOL). Read the letter here: http://wapo.st/1gc0qIU.
• 9/18/2013—21 Senators wrote to oppose any regulation providing unions a special exemption through the DOL. Read the letter here: http://1.usa.gov/1fufmo1.
• 10/30/2013—Read the proposed rule issued by the Centers for Medicare and Medicaid Services (CMS) to exempt unions from reinsurance fee here: http://1.usa.gov/1fPVXxg.
• 11/13/2013—Senators write to oppose CMS proposed rule. Read the letter here: http://1.usa.gov/1as2wE3.