New York Metro Chapter
Physicians for a National Health Plan
New York, New York
April 22, 2014
James L. McGee, CEBS
Executive Director, Transit Employees H&W Fund
Member, UA Local 520, Harrisburg, PA
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My background
Multiemployer plans
◦ As a model for health care reform
◦ Threatened by health care reform
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AFL-CIO Resolution 54
Where we go from here
◦ Opportunities
◦ challenges
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What are they?
How do they work?
Why do they matter?
Challenges presented by the ACA
◦ To multiemployer funds
◦ To collectively bargained plans
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Resources
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Preferred term is multiemployer plan,
◦ Taft-Hartley Plan
◦ Trust Fund
◦ But please, not “union plan”
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Not just construction industry
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Teamsters
Entertainment Industry
UFCW
Hotel workers
Longshore workers
Mimicked by Teachers and Public Employees
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Governed by joint Board of Trustees
Frequently self-insured
Certain advantages to employers
◦ Access to skilled workforce for short periods of
time
◦ Only responsibility is to write a check
◦ No responsibility for maintaining enrollment and
other admin headaches
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Collectively bargained
Parties frequently negotiate a “total package”
allowing money to be redirected if necessary
One or more unions/locals
One or more employer associations
“Reciprocal Agreements” allow members to
work in other jurisdictions and maintain
benefits
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Provide continuity of coverage across multiple
employers (reduce churn)
Normally provide coverage during brief
periods of unemployment
Eligibility based on hours worked over
flexible eligibility periods. Examples:
◦ 150 hours per month
◦ 400 hours per quarter
◦ 1500 hours per year.
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Contributions - normally per hour
◦ From $5 - $15 / hour worked
◦ The lower the hours the higher the hourly rate.
◦ Think of $12/ hour as the benchmark
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Provides coverage during periods of
unemployment, and highly subsidized rates
during retirement.
Operating principle
◦ Pay while you work to have coverage while you are
not
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They cover 26 million workers
The funds are a source of pride
They represent a model for health care
reform
◦ Pay while you work to be covered while you are not
◦ A model for providing benefits to the marginally
employed, the part time workers and part year
workers
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◦ Coverage for low income and part time employees
undermined
◦ Could MEP count as Qualified Health Plans?
 Administration says NO
◦ Consequences of NO
 Employers not eligible for tax credits
 90% of employers count as “small” employers
 Employees not eligible for subsidies
◦ Aggravate the competitive disadvantage of MEP
◦ Increase churn
◦ Break up employer group
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Objections to the ACA
◦ Taxation is unfair
◦ Employer mandate in not equitable
◦ Status of Taft-Hartley Plans to the exchanges
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◦ Taxation is Unfair
 Cadillac Tax –
 PCORI
 Tax to support patient centered outcomes research
 $1 per covered life in 2013 and $2 for 2014 and 2015
 Reinsurance Fee
 Fee on self insured plans to finance a fund to underwrite
losses that insurance companies might suffer on the public
exchanges
 $64 per covered life
 Levied on non-profit funds to support for profit insurance
companies
 No mechanism to return the money if insurance companies
don’t incur losses
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◦ The Employer mandate
 Applies to employers with >50 full time employees defined
as employees that work 30 or more hrs. per wk.
 The regulatory interpretation highly favors employers
 Industries such as the food and hotel workers have already
begun to eliminate part-time workers from health coverage
 Other industries are reducing hours in order to escape the
impact of the ACA
 Penalty only applies when an employee gets a ‘subsidy’
 Does not apply if employee gets free Medicaid coverage
 Most multiemployer employers are small employers
 That’s why Resolution 54 asks for the penalty >5
employees
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The Employer mandate
Two penalties
◦ If no insurance is offered $2,000 per employee after
30 employees
◦ If “skinny plan” is offered, only $3,000 per
employee who gets subsidy on the Exchange
◦ “Skinny Plan”
 Not good enough
 Not cheap enough
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◦ Status of Taft-Hartley plans and the Exchanges
 Taft-Hartley plan sponsors hoped the ACA would level the
competitive playing field
 Instead they are further disadvantaged
 Most employers who participate in MEPs are small
employers
 Small employers who buy from the Exchanges qualify for
Tax credits
 Proposed solution
 Permit MEP to be defined as QHPs allowing them to reside
on the Exchanges
 This solution is problematic for a variety of reasons
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Affordable coverage and equitable financing
desired by Labor
Continuity of coverage desired by Labor and
undermined by the ACA
Group solidarity desired by Labor and
undermined by the ACA
The Trojan horse in the ACA
◦ Health care as an individual responsibility
◦ Facilitates private Exchanges
◦ Health care should be regarded as a public good
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◦ To “grandfather” or not
◦ “Free rider” penalty
 Watch out for “skinny” plans
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How do you stack up to “Essential Health Benefits”
Planning for the “Cadillac tax”
Low wage and part time employees
Spouses not required to be covered
Children not required to be “affordable”
Coverage Continuation Issues
 COBRA
 Pre-Medicare Retirees
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Private Exchanges
◦ Enabled by the ACA
◦ Mechanism for Employers to move to a DC
approach
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Churn – Diminished Continuity of Care
◦ Consequence of the ACA
◦ Split up families
◦ Split up employer groups
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Increased out of pocket expense
Onerous Employer reporting requirements
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Contradictions between fragmented
insurance purchasing and ACA efforts to
move away from fee for service
reimbursement
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Jim McGee
1920Jimmy@gmail.com
202-256-9594
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