THE AFFORDABLE CARE ACT
You don’t need to be told how complex healthcare has become, especially with the changes involving the implementation of the Affordable Care Act (ACA). This legislation has afforded millions of Americans a chance at securing health insurance that covers pre-existing conditions. Its effect on multi-employer plans such as ours has forced us to anticipate and preemptively adapt to the changing realities it will bring to the health care marketplace and multi-employer plans.
For decades, this union and our employers have provided affordable, high-quality health care coverage for members through our multiemployer health plans. This was accomplished jointly by labor and management through the collective bargaining process, and has enabled us to offer good living wages and benefits to members and their families throughout the United States.
So far, we have recognized the potential harm the ACA will have on the viability of our multi-employer plans through the high employee threshold of the employer mandate, its definition of a qualified health plan, and the reinsurance fee.
The ACA’s high threshold mandate does not penalize small businesses with fewer than 50 employees for failing to offer them health care coverage. This means almost all non-union construction industry employers (93% of whom have fewer than 20 employees), are not required to provide health care coverage for their workforce. The high threshold for coverage gives these employers a cost advantage in bidding for work, and that has the potential to undermine the quality health care, wages, and retirement we have achieved.
As currently worded, the ACA does not include multi-employer health plans in the definition of a qualified health plan. This is because plan participants already have health care coverage, and the intent of the law is to expand access to the uninsured through tax credits, not provide tax credits to those already with insurance coverage. Since many non-union employers employ workers without health care coverage, this allows those employers to have their substandard health care offerings subsidized through government tax credits.
Additionally, the Department of Health and Human Services and individual states will begin charging $63 for each and every individual (member, spouse, dependents) enrolled in a plan outside of the exchanges, starting at the end of this year. For self-insured health plans, which include the majority of multi-employer plans, the administrator is responsible for paying the assessment. In our industry, the plan administrators are the trust funds. This will have the effect of shifting an additional expense onto our participants.
MAPD and SMW+
In order to protect our members from the adverse effects of these changes, we took steps to enhance our health care offerings to provide the best possible benefits to members and retirees. After a careful and extensive process, we first extended our SMW+ offering to members of all local unions. We also studied various Medicare eligible programs, which resulted in an arrangement with Humana, a nationally recognized and respected firm, to offer retirees a Medicare Advantage Plan. Commonly referred to as a MAPD, this plan includes a broad and costeffective prescription drug program. While this same plan is available to individuals through private markets, SMART has been able to negotiate a much lower discounted rate for the same products and services for the benefit of members and their families.
We did this by utilizing our regional healthcare model that capitalizes on larger groups of participants and puts us in better position to negotiate lower rates that would be advantageous for our members. Instead of each fund negotiating separate agreements with providers, we negotiated one agreement with the leverage provided by the sheer number of our members.
Many plans and locals already have MAPDs or offer Medicare supplement plans and Rx coverage through other avenues, like selffunding or some other combination. We want to offer, however, a way to reduce costs through our collective numbers, especially in the face of rising health care expenses which are being realized by health care consumers nationwide.
Retirees are now taking advantage of SMW+ and SMART MAPD plans, and we expect that number to increase throughout the year. We are also looking at ways to improve upon and expand the MAPD in 2015 so we can meet the needs of more members.
Traditionally, we have offered the SMW+ product, and participants are pleased with its results. However, the marketplace has put retired members in a position where they are inundated with offers for products from every avenue of the health care market. That is why it is important to know what is already available from your union without the need to purchase redundant or possibly more costly and substandard coverage from an outside commercial provider.
The Excise Tax
Due to the battery of questions on the Affordable Care Act I have been asked, and the high interest revolving around its effects, I want to mention the excise tax, also known by detractors as the so-called “Cadillac tax.” By the sound of it, you might think these plans cover extravagances such as annual trips to Swiss medical spas, cosmetic surgery, and weekly massages. That is nowhere near reality. While there are CEOs who do enjoy the luxuries of their own expensive health care plans, union members utilize plans that are more expensive due to the hazards associated with their occupations. These plans are not some luxury or perk, they are hard-fought benefits negotiated and fully paid for by you, for you and your family. Remember that the next time you hear an attack on your so-called “Cadillac” health care plan.
This excise tax will apply to health plans where major medical benefits provided to employees are valued at more than $10,200 for single coverage and $27,500 for family coverage. The amount of the excise tax is 40% of amounts over the threshold, which will be subject to an annual adjustment for health costs, age, gender, and cost-of-living. We are monitoring developments as they pertain to the anticipated rollout of this tax in 2018, and I assure you that we are working to adjust accordingly to minimize the damage it will have on coverage for plan participants and their families.
As the Affordable Care Act continues to roll out, each of us needs to be prepared to face the challenges to our health care coverage and make sure we are fully informed. From time to time, we will distribute news and notices on actions taken to fix the Affordable Care Act so that it does not deteriorate your health care coverage. You can stay up to date on news regarding this important issue by visiting our homepage at smart-union.org and signing up at smartaction.org to assist us in fighting for your rights as a member and consumer.
Joseph Sellers, Jr.
SMART General Secretary-Treasurer
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