Big Labor Public Outrage Pays Dividends
Unsurprisingly, the Obama administration is looking to quell labor leaders’ complaints over Obamacare by offering them taxpayer money.
As reported by InsideHealthPolicy, regulations are being devised to offer subsidies to labor union members in multi-employer health insurance plans that were intended only for the uninsured and low-income workers whose employers do not offer insurance.
Even before this prospective subsidy, multi-employer health plans are tax advantaged. These health plan, also known as Taft-Hartley plans, benefits are provided tax-free to workers and beneficiaries. In addition, employer contributions to multi-employer benefit plans are tax deductible.
However, Avik Roy in Forbes counters that an act of Congress is the only legal way to apply the uninsured subsidy to union members in multi-employer plans:
it’s not clear what the White House can unilaterally do to address unions’ concerns. The text of the Affordable Care Act is straightforward; if you have gained coverage through an employer-sponsored health plan, you’re not eligible for subsidized coverage in the exchange, because you already get a subsidy through the tax code: you don’t pay income or payroll taxes on the value of your health coverage.
Further, nearly 20 million people participate in multi-employer plans. Roy points out that if even half of these workers gained the the $5,000 per year in tax credits “along with their tax-free health benefits, we’re talking $50 billion a year in additional insurance subsidies for those individuals. That’s more than half a trillion dollars over ten years, accounting for health inflation.”
Sadly this is par for the Obama administration’s course, which is to payoff special interests at the expense of taxpayers.