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

 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, McGee2

 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, McGee3

 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, McGee4

 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, McGee5

 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, McGee6

 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, McGee7

 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, McGee8

 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, McGee9

◦ 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, McGee10

 Objections to the ACA ◦ Taxation is unfair ◦ Employer mandate in not equitable ◦ Status of Taft-Hartley Plans to the exchanges PNHP, NYC, McGee11

◦ 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, McGee12

◦ 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, McGee13

 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, McGee14

◦ 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, McGee15

 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, McGee16

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◦ 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, McGee18

 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, McGee19

 Contradictions between fragmented insurance purchasing and ACA efforts to move away from fee for service reimbursement PNHP, NYC, McGee20

 Summary or ERISA ◦ ISA.pdf ISA.pdf  National Coordinating Committee for Multiemployer Plans ◦  Unions and the ACA ◦ report.pdf report.pdf ◦ on-ppaca-concerns on-ppaca-concerns ◦ cers.0813.html cers.0813.html  Employer Penalties under ACA ◦ flowchart.aspx flowchart.aspx PNHP, NYC, McGee21

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Jim McGee PNHP, NYC, McGee23

 >50 FT employees  FTEE receives credit or subsidy  FTEE not offered coverage  FTEE coverage is unaffordable ◦ EE share > 9.5% of family income ◦ ER may use W-2 income PNHP, NYC, McGee24

 Business less than 50 through 2016  Insured plans only  Varies by state  Subject to Essential health benefits PNHP, NYC, McGee25

 Employer cost of coverage v subsidized cost of coverage  Paying employees for tax affect  Penalty PNHP, NYC, McGee26