Labor unions 'bitterly disappointed' with proposed ObamaCare regulations

FILE: September 28, 2013. A man fills out an information card during an Affordable Care Act outreach event hosted by Planned Parenthood for the Latino community in Los Angeles, Calif. (REUTERS)

Leaders of major labor unions are pushing back against proposed regulatory changes that could affect some union-sponsored health plans under ObamaCare, arguing the proposals do nothing to help workers suffering under the law.

In a letter to Senate Majority Leader Harry Reid, D-Nev., and House Minority Leader Nancy Pelosi, D-Calif., the presidents of two high-profile labor unions said they are "bitterly disappointed" with the administrations's proposed rules, The Hill reported.

Terry O'Sullivan, president of the Laborers’ International Union of North America, and D. Taylor, president of Unite Here said the administration has failed to address their concerns about union plans and that ObamaCare threatens to lower the standard of living for the working class.

"If the administration honestly thinks that these proposed rules are responsive to our concerns, they were not listening or they simply did not care,” the letter said. "It would be a sad irony if the signature legislative accomplishment of an administration committed to reducing income inequality cut living standards for middle income and low wage workers."

The two labor leaders also suggested that Labor Secretary Thomas Perez, in a recent letter to lawmakers, might have misled them to believe that the proposed changes address unions' concerns about the Affordable Care Act, according to The Hill.

“That letter has been construed by some to suggest that the very serious concerns of ‘Taft-Hartley’ multi-employer health and welfare trust funds and other non-profit self-funded plans with the ACA has been addressed,” O'Sullivan and Taylor wrote. “This is simply not true regardless of the secretary's good intentions.”

Labor unions have complained the law will drive up the costs of certain health plans that are jointly administered by unions and smaller employers. The White House has rejected a broader request that union members in those plans be eligible for federal subsidies.

Unions and many businesses groups also have been complaining about the so-called "reinsurance fees," which kick in this 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.

In October, the Obama administration proposed a rule change that would exempt "certain self-insured, self-administered plans" -- those that do not use a third-party administrator for core functions -- from the requirement to pay the fees in 2015 and 2016.

Republicans charge this is aimed at unions' so-called Taft-Hartley plans, though union officials had downplayed the change and suggested most of their plans would not be eligible for the exemption because they also use third-parties to process claims.

Some GOP lawmakers argue the change is clearly aimed at unions, particularly after labor leaders made a high-profile push to extract some relief from ObamaCare.

“Once we realized the ACA would not let us keep the health care we had, we spent three years presenting the administration with reasonable fixes to the ACA's problems," the union leaders wrote. "All of them were rejected and the proposed regulations offer virtually no assistance toward any of these solutions."

In September, the AFL-CIO approved a resolution saying that the "highly disruptive" implementation of ObamaCare will drive up the costs of union-sponsored health plans to the point that workers and employers are forced to abandon them.

Republican critics of the health care law have seized on the union complaints to fuel their push to repeal the law. At the same time, GOP leaders have warned the White House against carving out any special deal for unions.

The Associated Press contributed to this report.

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