Understanding Multiemployer Health Plans in the U.S.

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Explore the world of multiemployer health plans, also known as Taft-Hartley Plans, governed by joint Boards of Trustees, negotiated collectively, and providing continuity of coverage across multiple employers. Discover their advantages, challenges, and the role they play in healthcare reform discussions.

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New York Metro Chapter Physicians for a National Health Plan New York, New York April 22, 2014 James L. McGee, CEBS Executive Director, Transit Employees H&W Fund Member, UA Local 520, Harrisburg, PA New York Metro Chapter Physicians for a National Health Plan

My background Multiemployer plans As a model for health care reform Threatened by health care reform AFL-CIO Resolution 54 Where we go from here Opportunities challenges PNHP, NYC, McGee 2

What are they? How do they work? Why do they matter? Challenges presented by the ACA To multiemployer funds To collectively bargained plans Resources PNHP, NYC, McGee 3

Preferred term is multiemployer plan, Taft-Hartley Plan Trust Fund But please, not union plan Not just construction industry Teamsters Entertainment Industry UFCW Hotel workers Longshore workers Mimicked by Teachers and Public Employees PNHP, NYC, McGee 4

Governed by joint Board of Trustees Frequently self-insured Certain advantages to employers Access to skilled workforce for short periods of time Only responsibility is to write a check No responsibility for maintaining enrollment and other admin headaches PNHP, NYC, McGee 5

Collectively bargained Parties frequently negotiate a total package allowing money to be redirected if necessary One or more unions/locals One or more employer associations Reciprocal Agreements allow members to work in other jurisdictions and maintain benefits PNHP, NYC, McGee 6

Provide continuity of coverage across multiple employers (reduce churn) Normally provide coverage during brief periods of unemployment Eligibility based on hours worked over flexible eligibility periods. Examples: 150 hours per month 400 hours per quarter 1500 hours per year. PNHP, NYC, McGee 7

Contributions - normally per hour From $5 - $15 / hour worked The lower the hours the higher the hourly rate. Think of $12/ hour as the benchmark Provides coverage during periods of unemployment, and highly subsidized rates during retirement. Operating principle Pay while you work to have coverage while you are not PNHP, NYC, McGee 8

They cover 26 million workers The funds are a source of pride They represent a model for health care reform Pay while you work to be covered while you are not A model for providing benefits to the marginally employed, the part time workers and part year workers PNHP, NYC, McGee 9

Coverage for low income and part time employees undermined Could MEP count as Qualified Health Plans? Administration says NO Consequences of NO Employers not eligible for tax credits 90% of employers count as small employers Employees not eligible for subsidies Aggravate the competitive disadvantage of MEP Increase churn Break up employer group PNHP, NYC, McGee 10

Objections to the ACA Taxation is unfair Employer mandate in not equitable Status of Taft-Hartley Plans to the exchanges PNHP, NYC, McGee 11

Taxation is Unfair Cadillac Tax PCORI Tax to support patient centered outcomes research $1 per covered life in 2013 and $2 for 2014 and 2015 Reinsurance Fee Fee on self insured plans to finance a fund to underwrite losses that insurance companies might suffer on the public exchanges $64 per covered life Levied on non-profit funds to support for profit insurance companies No mechanism to return the money if insurance companies don t incur losses PNHP, NYC, McGee 12

The Employer mandate Applies to employers with >50 full time employees defined as employees that work 30 or more hrs. per wk. The regulatory interpretation highly favors employers Industries such as the food and hotel workers have already begun to eliminate part-time workers from health coverage Other industries are reducing hours in order to escape the impact of the ACA Penalty only applies when an employee gets a subsidy Does not apply if employee gets free Medicaid coverage Most multiemployer employers are small employers That s why Resolution 54 asks for the penalty >5 employees PNHP, NYC, McGee 13

The Employer mandate Two penalties If no insurance is offered $2,000 per employee after 30 employees If skinny plan is offered, only $3,000 per employee who gets subsidy on the Exchange Skinny Plan Not good enough Not cheap enough PNHP, NYC, McGee 14

Status of Taft-Hartley plans and the Exchanges Taft-Hartley plan sponsors hoped the ACA would level the competitive playing field Instead they are further disadvantaged Most employers who participate in MEPs are small employers Small employers who buy from the Exchanges qualify for Tax credits Proposed solution Permit MEP to be defined as QHPs allowing them to reside on the Exchanges This solution is problematic for a variety of reasons PNHP, NYC, McGee 15

Affordable coverage and equitable financing desired by Labor Continuity of coverage desired by Labor and undermined by the ACA Group solidarity desired by Labor and undermined by the ACA The Trojan horse in the ACA Health care as an individual responsibility Facilitates private Exchanges Health care should be regarded as a public good PNHP, NYC, McGee 16

PNHP, NYC, McGee 17

To grandfather or not Free rider penalty Watch out for skinny plans How do you stack up to Essential Health Benefits Planning for the Cadillac tax Low wage and part time employees Spouses not required to be covered Children not required to be affordable Coverage Continuation Issues COBRA Pre-Medicare Retirees PNHP, NYC, McGee 18

Private Exchanges Enabled by the ACA Mechanism for Employers to move to a DC approach Churn Diminished Continuity of Care Consequence of the ACA Split up families Split up employer groups Increased out of pocket expense Onerous Employer reporting requirements PNHP, NYC, McGee 19