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Obamacare Could Crush Union Movement

Posted: September 15, 2013 at 6:30 am   /   by

Labor Leaders Fear Loss of Members

It must have been an awkward moment in the White House late Friday when President Obama met with AFL-CIO President Richard Trumka to discuss the negative fallout from Obamacare.

Trumka was fresh off the AFL-CIO convention in Los Angeles, where members passed a resolution saying Obamacare had to be changed to avoid disrupting existing contracts between employers and workers. Trumka followed up with a direct appeal to the president. The president turned him down.

The story is not over, but it looks like Obamacare is taking its greatest toll of all – strenuous objections from one of the key supporters of the president and his party. At stake as well is the very future of the entire union movement.

Unions want subsidies available in the Obamacare insurance exchanges. They are concerned about higher costs for members now covered under multiemployer health care plans. They are also worried that Obamacare will force employers to disrupt one of the labor movement’s most cherished accomplishments – the 40-hour work week.

According to news reports, Obama personally lobbied Trumka during the AFL-CIO convention to head off harsh resolution language that might have called for the repeal of Obamacare unless union members received relief.

Trumka was successful in meeting the president’s request. The resolution passed at the convention said Obamacare was a worthy program, but needed action by the administration or Congress to meet union demands.

Obama is in a hopeless bind. The Treasury Department issued a ruling that union members who receive health care under multiemployer contracts are not eligible for Obamacare subsidies. The subsidies are intended only for uninsured individuals who sign up to buy insurance in the state or federal insurance exchanges.

Earlier this year, the Congressional Research Service issued a similar opinion, saying that individuals enrolled in a multiemployer health care plans would not be eligible for Obamacare subsidies.

Union officials are in a panic. If millions of their members face higher health care costs and a shorter work week under existing labor management contracts, they could bail out of union membership altogether and buy their health insurance on the Obamacare exchanges.

Premium health care coverage and the 40 hour work week have long been the backbone of union contracts. If unions no longer provide such coverage and protection, members could leave unions in droves.

Less than 7 percent of American private sector workers are union members. Union membership is increasingly the preserve of public sector employees. Unions are desperate to retain the shrinking number of private sector members.

There is still time for the president to accommodate the unions. He let employers off the hook with a one-year delay in the mandatory requirement that they provide employee insurance. But he has failed to budge on the mandatory requirement for individuals.

Obama has never shied away from rewriting laws when it meets his needs, and the stakes are high with Trumka and the AFL-CIO. The huge labor organization is a source of millions in campaign funds and an army of campaign workers. Watch for the president to find a way to meet the demands of the Democratic party’s most staunch supporter.

Unions will not easily be rebuffed by the president. Now it is more than a matter of health insurance subsidies for their anxious members. It is a matter of their survival.