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ACA White Paper

ACA White Paper

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Published by Tom Gara
A white paper on healthcare reform from the International Brotherhood of Electrical Workers
A white paper on healthcare reform from the International Brotherhood of Electrical Workers

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Categories:Business/Law
Published by: Tom Gara on Jul 16, 2013
Copyright:Attribution Non-commercial

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07/29/2013

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The Affordable Care ActRepair and Reform
 A white paper on the effects of the PatientProtection and Affordable Care Act onmultiemployer health plans.
For over 65 years, the International Brotherhood o Electrical Workers (IBEW) andits employers in the construction industry have provided aordable, high-quality health care coverage or workers through multiemployer health plans. Working jointly as labor and management through the collective bargaining process, we havestrived to oer competitive living wages and benets to employees and their amiliesnationwide. Unortunately, these plans are in jeopardy. Te Patient Protection andAordable Care Act (ACA) is threatening the multiemployer health plan coverage o 26 million Americans.
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 About Multiemployer Health Plans
Multiemployer health plans are operated and administered by a board o trusteescomprised equally o representatives rom labor and management. Most o these plansare sel-insured in order to reduce employer costs and increase benets to participants.Across all industries, the current multiemployer plan system provides aordable, high-quality health care coverage to millions o American workers, retirees, and amilies.Participating in a multiemployer plan allows businesses to spread risk across a larger,more diverse pool o individuals, which reduces premium costs. In addition, con-struction industry employers have the ability to hire short-term employees withoutthe burden o increased administrative costs.Te IBEW’s multiemployer health plans provide an opportunity or continuous cover-age or participants through a national reciprocity system. National reciprocity allowsIBEW members to work or multiple employers throughout the United States withoutan interruption in health care coverage. Due to this unique structure, it is commonor members to maintain coverage during times o unemployment or disability.
Te ACA’s Eect on Multiemployer Health Plans
Te ACA threatens the viability o multiemployer health plans in our ways: 1) thehigh employee threshold o the employer mandate, 2) the reinsurance ee, 3) thedenition o qualied health plans, and 4) the lack o multiemployer-specic ad-ministrative guidance. We believe it may be impossible to reverse the damage doneto these plans i these issues are not resolved. Te IBEW cannot aord to sit on thesidelines as the ACA threatens to harm our members by dismantling multiemployerhealth plans.
Te IBEW is asking the Obama administrationand Congress to mitigate thenegative impact the ACA will have on small businesses already  providing health carecoverage to employees.
 
The Affordable Care Act: Repair and Reform
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High Employee Treshold or ACA Requirements
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Te ACA does not penalize small businesses with less than 50 employees or ailingto oer their employees health care coverage. Tis exempts almost all constructionindustry employers rom the ACA employer mandate. By not requiring constructionemployers to oer health care coverage to their employees, the ACA begins a race tothe bottom with respect to benets. Employers contributing to multiemployer healthplans will be orced to choose whether to provide health care benets or their em-ployees or remain competitive.Tis high employee threshold will have a devastating eect on the entire constructionindustry. Approximately 93% o employers in the industry have ewer than 20 employ-ees.
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In electrical construction specically, almost 70% o employers have 20 or eweremployees.
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Tus, these small businesses will be placed at a competitive disadvantagecausing multiemployer health plans to dissolve and employees to be responsible orpurchasing their own coverage through the exchanges.Although the exact type o health care coverage that will be available throughthe exchanges is unknown, it is likely that it will not be comparable to that availablethrough multiemployer health plans.
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In addition the premiums o the exchange planswill vary or individuals based on income, age, amily size, and other actors.
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Tismeans that two employees working in the same job with identical responsibilities couldpay dierent amounts or health care coverage through an exchange.
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Calculating andtracking these cost variances would make it very dicult or an employer to providehealth care coverage through an exchange.
Te Reinsurance Fee
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Beginning in 2014 and continuing until 2016, either the Department o Health andHuman Services or individual states will assess a ee or everyone enrolled in a planoutside o the exchanges.
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Health insurance carriers will pay the ees on behal o em-ployers who sponsor ully insured plans.
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Presumably, the carrier will pass this costand any additional ee on to the employer or employee through increased premiums.For sel-insured plans, which includes the majority o multiemployer health plans, theplan administrator will be responsible or paying the assessment.
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 In multiemployer plans, trustees set the benets, corresponding contributions,premiums, and employee co-pays. Just like ully insured plans, sel-insured plans willrecoup the expense o the reinsurance ee by increasing the employee and employercontribution amounts. Tis means collective bargaining agreements between IBEWlocal unions and their contractors will need to be renegotiated. Tis creates anopportunity or the multiemployer health plan structure to change, shifing moreindividuals into the exchanges and leaving ewer dollars to und ACA provisions. Asindividuals leave multiemployer plans, there will be ewer people to shoulder thereinsurance ees—resulting in higher per-person costs and orcing even more indi- viduals into the exchanges.
Defning Qualifed Health Plans
 As currently structured, the ACA does not include multiemployer health plans inthe denition o a qualied health plan. As a result, employees do not qualiy or thesubsidy to oset the cost o health care coverage and employers do not qualiy or thetax credit or contributions to sel-insured multiemployer plans.
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In order to x thisproblem, the implementing regulations should deem all multiemployer health plansas qualied health plans. Doing so would alleviate two major problems with the ACA.First, assuming IBEW members meet all other qualications, the ACA individualsubsidy to oset the cost o health care coverage would be available to them. Second,dening multiemployer health plans as qualied health plans would allow otherwise
“And that means that nomatter how we reormhealth care, we will keepthis promise: I you like your doctor, you will beable to keep your doctor.Period. I you like your health care plan, you will be able to keep your healthcare plan. Period. Noone will take it away. Nomatter what. My view isthat health care reormshould be guided by asimple principle: fx what’sbroken and build onwhat works.” 
—President Obama, July 16, 2009 
 
The Affordable Care Act: Repair and Reform
3
eligible small employers to receive the tax credit or contributions to multiemployerhealth plans.
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 Tis disparity in treatment between collectively bargained plan contributions and thecontributions to other health plans will create another competitive disadvantageor employers who have been providing quality coverage or their employees oryears. Failure to deem multiemployer health plans as qualied health plans will orceemployers to reconsider participation in multiemployer health plans in order to remaincompetitive.
Te Lack o Specifc Guidance or Multiemployer Health Plans
 Despite many eorts by the National Coordinating Committee For MultiemployerPlans (NCCMP) and other groups, application o the ACA to multiemployer healthplans remains unclear. In several cases, multiemployer health plans have been ad-dressed through transitional rules. An example is the transitional guidance in placeuntil 2014 or the §4980H pay or play penalty.
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However no clear guidance has beengiven with respect to the eect o other provisions, such as the 90-day limit on wait-ing periods beore an individual is covered by a plan. Te proposed rule issued by theDepartments o reasury, Labor, and Health and Human Services addresses “variablehour employees,” which seemingly covers participants in multiemployer health plans,but a nal rule has not yet been issued.
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 It is important to keep in mind the reporting dierences or multiemployer healthplans. Due to the nature o the construction industry, work-hours are ofen unpre-dictable. Most plans are unded, and eligibility is determined, on a per-work-hourbasis. Multiemployer health plans do not receive inormation on hours workeduntil at least one month afer the hours were worked. Tis makes the requirementsassociated with providing notices to employees and paying ACA-required ees morecomplex or these plans. For example, the notice required by the Department o Health and Human Services regarding availability o exchange coverage containsa section where the employer must indicate whether the employee will qualiy orhealth care coverage within 90 days. Because o the way work-hours are reportedor multiemployer health plan participants, employers will not know whether anemployee qualies or coverage within this time rame.So ar this problem has not been addressed by any o the agencies responsible orimplementing ACA provisions. It is not clear how multiemployer plans will comply with portions o the ACA or t into the new health care insurance system beginningin January 2014. Further administration guidance is needed.
The IBEW is asking for your help in lobbying the Obamaadministration and the Departments of Treasury, Labor, andHealth and Human Services, to work together to proposeadministrative regulations that will address the issuesexplained in this white paper. Absent administrative action,the IBEW is asking Congress to address these concerns byamending the ACA. This would reduce the negative impact onsmall businesses already providing good health care coveragefor employees.We look forward to working with you on these critical issues.
Call to Action

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