WASHINGTON — The federal government on Friday rejected pleas from labor unions for a dispensation from President Obama’s health care law.
The decision, likely to infuriate some of Mr. Obama’s closest political allies, denies federal tax credits to workers who receive health coverage under employee benefit plans sponsored by more than one employer. Such plans are common in construction and other industries.
Under the 2010 health care law, the tax credits will be available starting next year to low- and moderate-income people who buy private insurance in state-based marketplaces known as exchanges. The administration’s decision was made by the Treasury Department, but almost surely approved by the president.
The Treasury said its conclusion resulted from a straightforward reading of the 2010 health care law, which says that workers are not eligible for premium tax credits if they have been offered affordable coverage under an employer-sponsored plan that provides minimum value.
“An individual who is covered by an eligible employer-sponsored plan would not be eligible to receive a premium tax credit,” the Treasury said in a letter to Congress.
via Administration Rejects Union Pleas on Health Law – NYTimes.com.
Major unions are concerned that as employers contributing to their trust funds figure out it is less expensive to pay the penalty if health benefits are not provided than to pay into the trusts, they will stop doing so thereby jeopardizing the trusts. There is also the issue of workers paying more for their employer-based coverage than coverage through an exchange with tax credits would cost … that’s a hard one to explain to people.
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