White House Scraps Option For Labor Union Obamacare Exemption, Despite AFL-CIO Anger

A few days ago, when we reported that the largest federation of unions, the AFL-CIO, had figured out that Obamacare was not all it was craked up to be and demanded changes be implemented to appease their constituency as pertains to multi-employer group health plans, many wondered if the administration would not simply cave and pass an exemption giving unions a sidedeal at the expense of all other participants. Last night that option was taken off the table when the Obama administration appeared to rule out giving unions a special deal to offer their workers extra ObamaCare subsidies.

As AP reports, “on Friday night, the White House said the Treasury Department had issued a letter making clear that it does not see a legal way for individuals in multi-employer group health plans to receive individual market tax credits as well as the favorable tax treatment associated with employer-provided health insurance at the same time.”

This come as Capitol Hill Republicans are now pursuing legislation that would prevent the administration from offering extra subsidies to union workers. Sen. John Thune, R-S.D., on Monday introduced the “Union Bailout Prevention Act,” which would stop the granting of subsidies to offset premium costs for the multi-employer plans held by many union members. Separately, the House voted on Thursday to stop all subsidies until the administration launches a system to verify recipients are eligible.

Needless to say, that this tangent is happening at a time when the GOP is trying to use Obamacare as a bargaining chip ahead of the debt ceiling negotiations (with just one month left until the Treasury’s X-Date), will only make a consensus outcome more problematic over concerns Obama will be seeking to do side deals with special voter interests.

Later, spokesmen for ranking House member Orrin Hatch of Utah and Ways and Means Chairman Dave Camp of Michigan issued a joint statement saying,“There has been far too much special treatment for politically-favored friends of ObamaCare.  But when it comes to employers and taxpayers picking up the health care tab for labor unions – it appears that is a price that is simply too high.


“Perhaps even this Administration recognizes that there are limits to them stretching the law to reward their friends.”

In the meantime, the labor unions are the ones worst off, with little leverage and little ability to push their cause further.

The AFL-CIO just passed a resolution blasting ObamaCare as “highly disruptive,” and the administration has been trying to convince the unions to lower the volume on their complaints about the law’s implementation. Trumka was coy after emerging from the meeting with Obama and Biden.


He called the meeting a “problem-solving session,” but declined to specify exactly what type of fixes were discussed.


“We’re going to try to get it done in the next week,” he said. Asked if that meant a new regulation or Congress-approved law, he said: “A solution.”


The meeting comes days after the AFL-CIO approved a resolution warning the law would drive up the cost of union-sponsored health plans and encourage some employers to drop coverage.


Unions want members to be eligible for the same federal subsidies available to low-income workers in the new health exchanges. The White House has resisted that remedy, saying the law doesn’t allow it.

There is still a loophole:

However, the White House did not specify exactly what it might do instead, if anything. It said only it would work with various plans to create “new, high-quality, affordable options” for everyone.

However, in light of the opportunity cost of passing a special deal at such a very sensitive time for reaching a grand bargain compromise, it seems that any loophole will not be pursued for the next month or so, leaving the AFL-CIO in an awkward position. Which then means many more furious union members, who will certainly feel betrayed by the administration. It remains to be seen how such anger will manifest itself.


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