By: Howard M. Wexler, Esq.

Upon the heels of the Obama Administration’s announcement that implementation of the large employer mandate under the Affordable Care Act (“ACA”) will be delayed until January 1, 2015 (discussed here), International Brotherhood of Teamsters General President James Hoffa, United Food and Commercial Workers International President Joseph Hansen, and UNITE-HERE President D. Taylor recently sent a very strongly worded letter to long-time pro-labor congressional leaders Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) complaining about several changes the labor movement is insisting be made to correct the ACA. If changes are not made, these union leaders believe that the ACA will “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.” This letter follows separate statements issued by several labor unions expressing anger with the delay of the employer mandate, including the UFCW’s statement that, “the Administration’s decision to delay employer health care requirements appears to be a significant hand-out to employers.”

The first complaint set forth in the joint letter is the ACA’s definition of a “full-time employee.” Under the ACA, a “full-time employee” for large employers entitled to health coverage is an employee who works on average at least 30 hours per week. The union presidents believe that the ACA creates an incentive for employers to keep employees’ work hours below 30 hours a week so as to avoid the obligation to provide health care coverage. As a result, the letter argues that the effect of this 30-hour threshold will be that: (1) employees will be assigned to work fewer hours, and thus receive less pay; and (2) individuals who presently have coverage will lose it when their hours are decreased below 30 hours a week. While complaining about the current 30-hour threshold, these union leaders fail to propose their view on who should qualify as a “full-time employee” for large employers under the ACA.

The second complaint outlined in the letter concerns the ACA’s impact on non-profit health insurance plans, such as Taft-Hartley plans, of which most of the rank-and-file membership of these three unions are members. The unions complain that, “[u]nder the ACA as interpreted by the Administration, our employees will treated differently and not be eligible for subsidies afforded other citizens. As such, many employees will be relegated to second-class status and shut out of the help the law offers to for-profit insurance plans.” In support of this belief, the union presidents opine that “even though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies” which will have the effect of rendering non-profit plans “unsustainable.”

The letter concludes by stating that changes to the ACA are needed that “will allow our members to continue to keep their current health plans and benefits just as you and the President pledged”, or else “the law as it stands will hurt millions of Americans including the members of our respective unions.”

Given the ever-changing requirements of the ACA, and efforts by labor and management alike to obtain favorable amendments and/or administrative interpretations concerning the ACA’s requirements prior to its implementation, employers are urged to continue checking this blog as well as Seyfarth’s Employee Benefits Group on twitter to receive up-to-the minute Management Alerts concerning the ACA, and also subscribe to Seyfarth’s ACA Resource Center, which serves as a guide for employers, lays out the compliance timeline facing employers, and addresses some frequently asked questions.