Wednesday, November 27, 2013

Obama Administration Exempting Unions From ObamaCare Reinsurance Tax...

Sen. John Thune, R-S.D.
Sen. John Thune, R-S.D. (Photo credit: Medill DC)
Senator John Thune (R-S.D.) is outraged that the Obama administration has announced plans to exempt union health care plans from the ObamaCare reinsurance tax.

In a tersely worded press release Thune said:

"...By publishing this proposed rule, the Obama administration moves closer to ensuring that its political allies will receive special treatment under the law...Despite endorsing ObamaCare and working fervently to get it passed, unions are now experiencing the ugly reality of this law, and they want out. This exemption is crony capitalism at its worst. I will continue to push for passage of my Union Tax Fairness Act, which would ensure that unions are not treated as if they are above the law..."

According to Thune's release, "...The ObamaCare reinsurance tax is scheduled to begin in 2014 and requires all self-insured plans to pay a tax for each person covered under a health plan. The tax was designed to provide funds to health care plans in the ObamaCare exchanges to help absorb the cost of care for people with pre-existing conditions..."

According to Phil Klein @ The Washington Examiner, the exemption for unions consists of the following:

"The relevant provision of President Obama's health care law, the Transitional Reinsurance Program, was set up as a way of preventing any given insurer from getting stuck with a disproportionate number of very sick individuals with high medical expenses now that they're forced to offer insurance to all comers...The intention was for the federal government to collect $25 billion in fees between 2014 through 2017 to fund partial reimbursement of insurers for taking on added risk. The fee was supposed to be $63 per plan participant in 2014...But unions strongly opposed the fee as a tax on the generous health care benefits they won through negotiation with private sector employers..."

Thune, who is chairman of the Senate Republican Conference has introduced the Union Tax Fairness Act (S.1724), which aims to explicitly prevent the White House from exempting unions from the reinsurance tax.

A statement from the Senator's office quotes co-sponsor of the Bill, Senator Orrin Hatch:

"...The Obama Administration can't just circumvent Congress whenever it wants to curry favor with its political allies...Since the overwhelming majority of self-administered health insurance plans are run by unions, let's call this what it is: a political payback by the Administration to its union friends for backing this disastrous law. But the fact is, the White House doesn’t have the authority to change the law on its own and, as this bill makes clear, any attempt at a Big Labor carveout from ObamaCare must be approved by Congress..."

The statement notes that the ObamaCare reinsurance tax is scheduled to begin in 2014 and requires all self-insured plans to pay a tax for each person covered under a health plan. The tax was designed to provide funds to health care plans in the ObamaCare exchanges to help absorb the cost of care for people with pre-existing conditions. Thune’s bill would prevent the White House from providing a special fix for unions that would exempt them from the reinsurance tax.

The Thune proposal is action taken after Senators Thune, Hatch, Lamar Alexander, and others, sent a letter that urged the Obama Administration to not move forward with a proposed regulation that would exempt unions from the reinsurance tax.

The letter states:

"...On September 18, 2013, 21 Senators wrote to you to ask that you 'not aughorize the relesase of any regulations that will create a specail carve out which benefits union workers' over other Americans.  We are disappointed to learn that the regulation published by the Centers for Medicare and Medicaid Services (CMS) on October 30, 2013, states that the agency intends to propose further rulemaking which would aim to exempt Taft-Hartley union health plans from the reinsurance fee mandated by the Patient Protection and Affordable Care Act (PPACA)..."

The letter ends with this:

"...It has been widely reported that labor unions recently sought an exemption from the reinsurance fee through Congress but were rightly rebuffed.  To think that the Obama Administration would consider such an action that benefits one group over another can only be characterized as cronyism at its worst. Self-insured health insurance plans--whether or not they also self-administer--are all facing the same dilemma of being forced to subsidize insurance companies participating in the new exchange.  The regulatory process is meant to implement the law as written, not as the Administration wishes it were.  If the law ill unfairly hurt certain groups, it should be repealed or amended through Congress..."

While Thune's Proposed legislation to bar the union exemption calls attention to the ObamaCare law "rule change," and has garnered some media attention, the Bill is not likely to pass muster in the Senate, unless Republicans can rally Democrat support.

It should be noted that labor union leaders asked to be eligible for ObamaCare subsidies back in September.

Byron Tau and Jennifer Haberkorn @ Politico reported that "...The labor unions have been asking that their union plans, known as Taft-Hartley plans, be eligible for premium subsidies the way plans on the new insurance exchange will be...A senior administration official said the White House looked at several ways to make the union plans eligible for subsidies but couldn’t find one...'It’s black and white,' the official said — there is no way to make the union plans, which are considered workplace benefits and already receive special tax treatment for that status, eligible.'..."

Apparently the Obama Administration has overcome the "black and white" clarity it had about ObamaCare subsidy provisions, and found the gray areas of crony-socialism to exempt unions from the reinsurance tax.


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