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THE MUSINGS OF A TRADITIONAL SOUTHERN DEMOCRAT

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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Tuesday, May 27, 2014

New Costs From Health Law Snarl Union Contract Talks - Workers and Employers Tussle Over Who Should Pay for New Costs Tied to Affordable Care Act

From The Wall Street Journal:

Disputes between unions and employers over paying for new costs associated with the Affordable Care Act are roiling labor talks nationwide.

Unions and employers are tussling over who will pick up the tab for new mandates, such as coverage for dependent children to age 26, as well as future costs, such as a tax on premium health plans starting in 2018. The question is poised to become a significant point of tension as tens of thousands of labor contracts covering millions of workers expire in the next several years, with ACA-related cost increases ranging from 5% to 12.5% in current talks.

Labor experts on both sides say the law doesn't take into account that health benefits have been negotiated by employers and unions over decades, and that rewriting plans to meet new requirements can affect wages and other labor terms.

Disputes between unions and employers over paying for new costs associated with the Affordable Care Act are roiling labor talks nationwide.

Unions and employers are tussling over who will pick up the tab for new mandates, such as coverage for dependent children to age 26, as well as future costs, such as a tax on premium health plans starting in 2018. The question is poised to become a significant point of tension as tens of thousands of labor contracts covering millions of workers expire in the next several years, with ACA-related cost increases ranging from 5% to 12.5% in current talks.

Another provision of the law that eliminates caps on annual and lifetime health-care costs has forced multi-employer plans to purchase their own insurance to prevent potential runaway costs from bankrupting plans.

Jim Ray, a lawyer who represents the Laborers International Union of North America in benefits negotiations, said these provisions have increased construction-industry health plans' costs by 5% to 10%, and already resulted in lower wages for some laborers. He said employers are frequently seeking contract language to cap their own liability for future cost increases from the law.

"When we first supported the calls for health-care reform, we thought it was going to bring costs down," he said.

In other cases, the law has resulted in some workers losing coverage from multi-employer plans. Last year, the United Food and Commercial Workers agreed to eliminate existing coverage for thousands of newer part-time workers at New England supermarkets, in order to preserve benefits for full-time workers.

The union says it replaced the coverage with a combination of benefits, including health savings accounts. Elsewhere, the union has agreed to several supermarket contracts that eliminate health coverage for certain members' spouses who have coverage available elsewhere.

"On a broad level, the biggest challenge facing all our negotiations is certain provisions the Affordable Care Act is demanding on plans," said Jill Cashen, a UFCW spokeswoman.

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