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Labor Unions Shoot Themselves in the Foot, Lose Coverage for Members

The passage of the Affordable Care Act is going to cost several very important groups of people a lot of time and money. It begs the question, how could a bill that so many hardworking Americans were against have slipped into law? You can rest assured that labor unions played a large role in the whole ordeal, and now they’re suffering because of it.

Hindsight is 20/20

Labor unions were one of the most prominent supporters of Obamacare, spending a lot of money ensuring that many Democrats were elected into Congress in 2006 and 2008, and fighting tooth and nail in 2009 and 2010 to make sure that the bill made it though legislation without any hiccups. Labor unions—who by very definition exist for the sole purpose of advancing their members’ interests in regards to wages, benefits and working conditions—are now the group of people who are responsible for their members’ quickly diminishing benefits.

As more and more information is released about Obamacare, it is becoming increasingly clear that not only will most everyone’s rates go up—despite promises otherwise—but that rates will be higher and the amount of benefits will often be lower—in some instances, much lower. Worse yet, Obamacare’s employer mandate to provide health insurance to all full-time employees will actually encourage small businesses to shift their workers to part-time status, a very real threat to many people’s livelihoods.

On July 11 of this year, representatives of three of the nation’s largest unions sent a letter to Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi stating that “Obamacare 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.” They go on to state that when President Obama and his congressional supporters sought the support of the unions, they specifically promised that the passage of the Affordable Care Act would in no way affect their current plans. Furthermore, they stated, the President pledged that if the unions and their members liked the plans they were on, they could keep them. Unfortunately, it looks as if the dream of “affordable, accessible health care for all” is backfiring on one of the ACA’s greatest supporters.

Many union leaders were slow to realize the harm Obamacare would inflict on their members, but now that they do, they’re terrified of what this means for them. And though they’re a major part of the reason we’re in this predicament, they can’t do anything now but shift the blame. Now, as the very real consequences become apparent to them, they’re all pointing their guilty fingers at everyone but themselves, demanding outright that “[Congress and Obama] need to fix [this problem].”

The question that plagues many is, “Why now?” It was pretty clear early on that Obamacare would motivate employers to cut their employees’ hours by as much as half, and that the ACA would drive premiums up. Why didn’t labor unions fight back then? Why did they wait until the act is mere months from implementation, when it may be too late to do anything about it?

Too Little, Too Late

Labor unions are fighting back now because they realize that not only will their members suffer, but also that they will suffer. Many of the insurance plans owned by union members offer generous coverage already, for an extremely great price; however, under the new law, the premiums for this incredible coverage will skyrocket.

On top of that, individuals with employer-sponsored coverage aren’t eligible for subsidies. So not only will union members be paying more, but they will receive less than what they would get from an exchange plan at the same price. This conundrum provides workers less incentive to join unions, as a big part of why people join unions and pay dues in the first place is to get more benefits for a lower price.

Union bosses are now pushing for employees under employer-sponsored coverage to be eligible for ACA subsidies—otherwise, workers will realize that they are paying taxes for subsidies they can’t receive, and upon this realization, be even less motivated to pay union dues than ever before.

In addition to receiving subsidies, union bosses are demanding that the employer mandate be repealed so that there is no incentive to cut workers’ hours whatsoever.

What’s Obvious to Many Isn’t So Obvious to All

It seems obvious now—and, indeed, to many union bosses, it was obvious when talks of health reform first surfaced—that the passage of the ACA would promote the continued slow decline of unions. Again, the very existence of unions depends on their abilities to advance their members’ interests in regards to wages, benefits and working conditions, but come next year, the government will take over the benefits aspect, and consequently, many workers’ hours—and therefore, wages—will be cut in half. When all is said and done, workers will realize that the need for unions is virtually non-existent. That being said, it is not surprising in the least that labor unions are unhappy with the inevitable outcome. Yet, they had every opportunity to take the bill in a different direction. That they didn’t—and that they’re now sweating over their uncertain future—is nobody’s fault but their own.

Let Us Help You

At HSA for America, we may not be able to undo the damage that has already been done for Labor Unions or their members, but we can help hardworking Americans like you find the coverage you need and deserve, for a price that is doable. Our goal is to help you—and others like you—find coverage similar to or better than what you had preObamacare, for a better price.

We take you through the steps that will allow you to maximize your coverage and minimize your total out-of-pocket expense. Check out our Complete Protection Strategy page to see how we can help you get more for less, today on our website.

Jim McFadden

I have been in the health insurance business for over 12 years.I'm passionate about Health Savings Accounts and enjoy blogging about them.I am also a husband and father of 2 beautiful children.