Unions React To Obamacare Delay

While the Right seizes a chance to crow, the labor movement expresses real anxieties.

David Moberg

Labor unions were some of the most ardent initial supporters of the Affordable Care Act, but some now fear that it will interfere with their ability to provide their members with health insurance. (congressman_honda / Flickr / Creative Commons).

Like many previous presidencies, the Obama administration may have thought it would escape intense public scrutiny of a public policy shift if it quietly released the news late in the day and shortly before a holiday. So last Tuesday evening, July 2, a Treasury official revealed that a major feature of Obamacare — the requirement that employers of more than 50 workers provide affordable health insurance or pay a fine — would be delayed a year.

Given how little political weight the Obama administration gives to union concerns, as exemplified by the multi-employer plan controversy, the labor movement has reason to nervously monitor every chess move in the ongoing battle over healthcare.

As usual, stealth didn’t work. Nearly all major players weighed in quickly and forcefully, with the partial exception of the labor movement, which offered limited, guarded reactions.

Republicans, from Karl Rove to John Boehner to Paul Ryan, along with countless other actual or aspiring leaders, tried to make a big deal of the change. They said it proved either:

Most of the critiques took on an apocalyptic air. Wall Street Journal columnist Daniel Henninger, for example, called the date of the policy announcement the day Big Government finally imploded,” an observation that — given his views — should have produced high praise for Obama as the man who finally ended Big Government. Most Republicans seemed to miss the irony that they were criticizing the president for delaying a measure they want to eliminate.

Democrats — with the exception of Sen. Tom Harkin of Iowa, who was not pleased with the delay—were inclined to see some hold-ups as routine in implementing major legislation (true, but hardly inspiring). Rep. Mike Thompson of California said in a hearing Wednesday that the delay showed the administration was simply trying to get it right.” Democrats and liberal supporters of Obamacare argued that a year’s delay would hurt few people, citing, for example, the Kaiser Family Foundation’s calculation that most large employers already provide insurance — an estimated 98 percent of workplaces with more than 200 employees offer their workers insurance, as do 94 percent of those with 50 to 199 employees. Of course, this also implies that few people will benefit from the employer mandate, though they still would gain from other protections in the legislation.

Big employer groups, such as the National Retail Federation, largely applauded the delay as necessary for them to prepare for the law’s requirements. Like the fast food and hospitality industries, retail businesses do not tend to offer their largely non-union, low-wage workers health insurance at all or at affordable prices, because they don’t have to in order to keep a revolving supply of workers. For them, meeting all of the plan’s requirements could be complex. Yet while some may indeed be planning for complying with the law’s intent, others may be exploring loopholes, such as the exemption for workers employed less than 30 hours a week.

Some reports claim the administration could use more time to prepare as well for implementation of many parts of the law, including the individual mandate starting Oct. 1., but the Obama officials have continued to insist that they will be prepared and that the delay is for the benefit of businesses. Republicans are trying a faux populist pitch on behalf of their effort to delay, at least, the requirement for individuals, criticizing Obama for giving a break to big corporations while denying it to the masses. That rings a bit hollow, considering that the GOP’s ultimate aim is to leave everyone pursuing insurance in the open market at his or her own expense.

Labor union also have a stake in the game, as major backers of the Affordable Care Act whose members will be much affected by it. As details of the law’s implementation have emerged, some unions have grown increasingly concerned. For example, many unions provide insurance through multi-employer or Taft-Hartley” plans that are jointly administered by labor and management and operate as pooled insurance buyers or cooperatives. But the Obama administration has interpreted the law as excluding multi-employer plans from the state insurance exchanges, putting them at a serious disadvantage in providing affordable insurance.

As the scrum unfolded last week, most unions reacted in a low-key fashion, with a few issuing brief formal statements. Those reactions ranged from vague general endorsements of the goal of universal healthcare to expressions of oblique grumpiness and anxiety about the administration’s implementation of Obamacare. 

On one end of the spectrum, the Service Employees International Union (SEIU) offered a largely upbeat view, though it is working with other unions on the multi-employer plan problems. Its statement read:

Today, despite all of the delay tactics and millions of dollars spent by right-wing extremists, the law is moving forward and the new healthcare markets will be ready to offer high quality, lower cost healthcare coverage to middle-class Americans as of January 1, 2014. We cannot lose sight of this goal, especially for working women and men who cannot afford to see a doctor or get the lifesaving prescriptions they need. The fair and flexible process developed by the administration in response to business concerns does not impede or delay that goal.

We will continue to work together with leaders and organizations from all walks of life to be ready for this date — including labor, small businesses and responsible employers, healthcare providers and advocates, faith leaders and elected officials — to make sure Americans are informed when it comes to their healthcare choices under the law.”

AFL-CIO president Richard Trumka sounded a more disgruntled note, expressing implicit anxiety that the delay might be an opening to modifying the principle that employers should share in the cost of health insurance. Trumka’s statement, issued the day after the announcement of the delay, indirectly asked the administration: If you can bend the process to accommodate corporations, can’t you show similar flexibility to preserve union Taft-Hartley insurance group plans? He said:

In the health reform debate, we fought to ensure that employers have a responsibility to provide affordable, comprehensive health benefits to their workers and their families. The employer responsibility provision included in the Affordable Care Act (ACA), while not as strong as we asked for, was designed to give large employers an incentive to offer or continue offering affordable, comprehensive health care coverage to some of their employees. The Administration’s announcement that it is delaying employer responsibility assessments until 2015 is troubling because it removes that incentive for next year. In light of this decision, we believe it is even more urgent for Congress and the Administration to reaffirm their commitment to employer responsibility.

We appreciate the need for flexibility and common sense implementation of a new law, particularly one of this scope. There are a number of areas in which we have asked that the ACA be interpreted to strengthen the delivery of benefits through employment-based plans. We hope the Administration will address these concerns just as they have the concerns voiced by employers.

AFSCME, the public employees union, issued a statement in response to an inquiry from In These Times. It focused on strengthening ACA in the future and downplayed the prospect of immediate problems stemming from the delay:

AFSCME supports much stronger employer responsibility requirements than provided by the ACA. But we don’t think the one year delay in the effectiveness of the employer requirements is very significant. On January 1, 2014 all Americans will have guaranteed access to health benefits for the first time in our nation’s history and that’s far more important than a one year delay in one of the weaker provisions of the law. We’re much more focused on improving and strengthening the ACA, than on provisions of the law that affect relatively few people. We would be very concerned if this was a retreat from requiring employers to shoulder their share of responsibility for health benefits, but we don’t think that it is.

The delay of the employer mandate prompted some commentators, such as conservative New York Times columnist Ross Douthat, to question why this major reform continues to use an anachronistic and inefficient system of linking health insurance to employment at all. One alternative would be a universal plan funded by progressive taxation of businesses and the rich.

The answer is politics: Obama, drawing on the Clinton administration’s misadventures and polling data, concluded that it was critical not to upset people who had insurance and liked it by suggesting they might have to change. But many big corporations actually like to use insurance plans as a way of attracting and holding skilled workers. (Of course, the same corporations often wish to dump responsibility for insuring lower-paid workers). And unions like to use their own plans as motivation for workers to unionize, and can trumpet successful bargaining for improved healthcare as proof of the value of unions — though in recent years, bargaining over health insurance has been a headache, mainly devoted to avoiding concessions and cutbacks as the cost has risen.

In the end, the entire brouhaha is largely about politics. Republicans hope to present Obamacare as a disaster in the 2014 elections, while Democrats and their supporters (even reluctant ones) hope to minimize the headaches and maximize the experience of new benefits as a campaign edge. It is no coincidence that the delay extends just months beyond the 2014 elections: corporations may generate fewer criticisms if they get their delay, but at the same time, a relatively small number of workers will be deprived of insurance through their employers, and many of them will be able to turn to the state exchanges.

Given how little political weight the Obama administration gives to union concerns, as exemplified by the multi-employer plan controversy, the labor movement has reason to nervously monitor every chess move in the ongoing battle over healthcare.

AFSCME is a sponsor of InThe​se​Times​.com.

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David Moberg, a former senior editor of In These Times, was on staff with the magazine from when it began publishing in 1976 until his passing in July 2022. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy.

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