Legislation introduced Monday by Sen. John Thune (R-S.D.) would prohibit union members from getting tax subsidies for their nonprofit, multiemployer health plans under the Patient Protection and Affordable Care Act.
People enrolled in "qualified health plans" can receive premium tax credits or subsidies to help cover the cost of their insurance under the healthcare reform law. Union health plans are currently not considered qualified plans under the PPACA, and labor leaders have expressed concern that employees will drop the multiemployer plans and shift workers to the new marketplaces if the union plans don't qualify for subsidies. The Obama administration has previously rejected a union request to be included on the exchanges.
Some 20 million Americans are covered by union-sponsored plans subsidized in part by groups of employers. Many of the plans' members could fall into the income category eligible for the insurance subsidies offered through the online health insurance marketplaces, but they are excluded because of their union benefits.
Because union plans already receive the employer tax exclusion, Sen. Thune believes offering premium tax credits to members enrolled in these plans would effectively force taxpayers to double-subsidize union workers' insurance, according to a news release. In the release, Sen. Thune said union leaders are looking for a "backroom deal," and the Obama administration should delay the "train wreck" of unions taking money from taxpayers to subsidize health plans.
Sen. Thune's bill isn't the first Republican effort to prevent subsidies for union health plans. Earlier this year, 31 Republican senators penned a letter to the White House urging the administration bar health plans jointly run by employers and unions from the subsidies.
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