Wyatt Employment Law Report

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Major Unions Join the Chorus Seeking Changes to the Affordable Care Act

By Edwin S. Hopson

According to the Wall Street Journal, three major unions, Teamsters, UFCW and UNITE-HERE, have written a letter to Senate Majority, Leader Harry Reid, and Democratic Leader in the House, Nancy Pelosi, complaining:

“Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated ‘December 31, 2013’ deadline for the employer mandate and penalties.”

More, specifically, they complain that the ACA creates an incentive for employers to keep employee work hours below 30 per week in order to avoid any obligation to provide health care coverage.  Next, they point out that under Taft-Hartley plans such as many of their members have, they will not be eligible for all the benefits that other employees will receive who are covered under lesser plans.  Finally, employees covered by so-called Cadillac plans will be taxed to pay for subsidies other employees receive, according to the letter.

Whether this approach will produce results remains to be seen.

See: http://blogs.wsj.com/corporate-intelligence/2013/07/12/union-letter-obamacare-will-destroy-the-very-health-and-wellbeing-of-workers/

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“Affordable Care Act” Update

By Mark C. Blackwell

Group health plans that are in place as of March 23, 2010 are “grandfathered” and many of the new health plan mandates applicable to new plans either do not apply, or do not apply until future years.  However, a number of new rules apply effective the first plan year that starts after Sept. 23, 2010, even if the group plan is grandfathered.  The primary rules that apply to grandfathered plans on January 1, 2011 (for calendar year plans) include:

 Extension of Dependent Coverage.  If the plan covers dependents, coverage for adult children is extended until age 26 (i.e., through age 25), unless the child is eligible to enroll in another eligible employer-sponsored health plan (until 2014).

 Prohibition on Lifetime Limits.  Applies to all group health plans.  An individual whose coverage ended due to a lifetime limit is eligible to reenroll when the new rule takes effect.

 Prohibition on Annual Limits.  Applies to all group health plans, subject to (i) a transition rule and (ii) possible “waiver”  where the transitional rule “would result in a significant decrease in access to benefits” or “would significantly increase premiums.”  The “transition rule” permits an annual limit no lower than $750,000 for 2011 plan year; $1.25 million for 2012 plan year; and $2 million for 2013 plan year.  The “waiver” is available by application to HHS and must be made no later than 30 days before the start of the plan year.  It is primarily available to so-called “limited benefit” plans or “mini med” plans that are made available to part-time employees, seasonal workers, etc.

 Pre-existing Condition Exclusion (under age 19).  Applies to enrollees under age 19; applies to all covered individuals effective 2014.

 Prohibition on Rescissions.  Coverage cannot be rescinded after enrollment, except for fraud or intentional misrepresentation of a material fact.