The health-care coverage of 26 million Americans is at risk if the federal government does not allow multi-employer health-care plans to participate fully in the Obamacare exchanges and other key aspects of the Affordable Care Act.
The exchanges operate as an insurance store for health-care consumers, distribute tax credits and subsidies, and are a cornerstone of President Obama’s health-care reform legislation.
The incomplete Affordable Care Act does not address the participation of the multi-employer plans in health-care reform. The answer to this and other gaps in the legislation is for the president to use his executive authority to fix them.
Multi-employer benefit plans are a product of the Taft-Hartley legislation enacted during the Truman administration and are subject to the Employee Retirement Income Security Act (ERISA). The plans are sponsored by unions and employers working through not-for-profit trust funds that are governed by an equal number of management and labor representatives.
Plan assets can be spent only on benefits to plan participants or for costs of administration. The plans are especially important for industries with mobile work forces, such as construction, where a worker may have several employers in a single year. Many plans provide subsidized coverage for retired participants not yet eligible for Medicare.
The rush to complete the Affordable Care Act came after the election of Sen. Scott Brown, R-Mass., in early 2010 took away the Democrats’ filibuster-proof majority. Before Brown was sworn in, the Senate had passed the statute, and that left final adoption to the then-Democratic controlled House of Representatives. After Brown was seated, the House could not return a revised bill to the Senate, where it would be subject to a filibuster. Instead it had to accept the flawed Senate bill as written, mistakes and all.
In a better world, the statute’s unintended consequences would be addressed by Congress and the executive branch working together after passions had cooled to fix the original legislation. The current realities of divided government make a legislative fix approved by both houses of Congress unlikely.
Under the statute, individual employers can buy health insurance for their employees through the health-care exchanges. Low-income employees can receive subsidies for the insurance cost. Multi-employer plans have an ambiguous status. While they should be recognized as having the same status as employers, the law does not specifically do so.
Multi-employer advocates have presented arguments to various government agencies in favor of recognizing the plans’ right to participate in the exchanges in the way employers can. If the agencies fail to do so before the 2014 implementation date for the exchanges, plans will find themselves unable to participate. The president should act now to ensure that multi-employer plans can participate in the exchanges.
Without access to the exchanges, multi-employer plans will be unable to provide coverage directly to participants and credits to employers. This in turn will encourage many employers and workers to abandon the multi-employer plans, and threaten the entire structure of multi-employer social protections.
Multi-employer health plans often provide more than basic health care coverage, including dental, vision, life insurance and unemployment benefits. Related plans created by the same groups of employers and unions also often provide pension and other retirement and social protection programs. All of these programs would be put at risk by a collapse of the multi-employer health-care plans.
At the beginning of the health-care reform debate, Obama promised Americans that if they liked their current health care, they could keep it. How ironic that health-care reform now has put multi-employer health plans at risk.
This is a problem with a solution that the Obama administration can fix through rulemaking and executive orders. And as similar issues arise from ambiguities and omissions in the Affordable Care Act, the president should not hesitate to use executive orders to clarify rules and ensure that health-care reform can move forward. •