Labor Calling for Changes to Obamacare at Convention

Sept. 11 (Bloomberg) -- The AFL-CIO will vote on a resolution that calls for changes to the Affordable Care Act, revealing divisions within the labor movement over whether the landmark health-care law is good for union members.

The labor federation’s executive council today approved the resolution, sending it to the delegates for debate during the final sessions of the group’s quadrennial constitutional convention, said Terry O’Sullivan, general president of the Laborer’s International Union of North America. More than 1,600 delegates and guests of the nation’s largest labor federation are meeting this week in Los Angeles.

“I didn’t hear any votes against it,” O’Sullivan said after a meeting of the executive council.

Drafts of the resolution call for changes to several provisions in the law, such as one that requires employees under certain plans to pay a fee to maintain coverage. Or one that classifies multi-employer plans as group plans to deny them subsidies. Republicans in Congress are vowing to block the changes sought by labor.

“We want to offer some constructive suggestions” to President Barack Obama, Fred Redmond, a vice president with the United Steelworkers Union and a member of the AFL-CIO executive council, said in an interview. “We’re walking a balance to make sure that our message to the president is not disrespectful and should not imply any lack of support for the plan.”

O’Sullivan said without subsidies, some of the health funds used by his members could be forced out of business. He also opposes a temporary reinsurance fee to offset costs of expanding coverage.

‘Devastating Impact’

“It can have a devastating impact on our ability to provide health insurance,” O’Sullivan said yesterday at a press briefing. “The one thing that is not acceptable at the end of the day is our members losing health insurance or our health and welfare funds going out of business because of Obamacare.”

Larry Cohen, president of the Communications Workers of America and an executive council member, said today’s action is only the first step in the bid to fix the health care law.

“The resolution is just coming out of the frustration people have about health care in America and its going to take a lot more than debate and resolutions to change that,” Cohen said in an interview. “I don’t think this is going to get fixed in a meaningful way in the weeks ahead.”

Republican Opposition

Senator Orrin Hatch, a Republican from Utah and Representative Dave Camp, a Michigan Republican, questioned the legality of the changes. Republicans opposed the 2010 law and have sought a a repeal.

“We will do whatever is within our power to ensure that the administration does not once again provide a special exemption to unions at the expense of American taxpayers,” the lawmakers said in a letter to Treasury Secretary Jack Lew.

U.S. Senator John Thune, a South Dakota Republican, this week introduced legislation that would make it illegal to provide subsides for certain existing health care plans.

A key issue in altering the law is whether the fixes sought by the unions can be implemented by the administration without congressional approval, according to Timothy Jost, a professor at Washington and Lee University School of Law in Lexington, Virginia.

For example, changing the part of the law that classifies multi-employer plans as group plans can only be made by Congress, Jost said.

“The Republicans aren’t going to fall all over themselves to make things better for the unions,” Jost said.

Subsidy Cost

There were 14.4 million union members in 2012, according to the Bureau of Labor Statistics. The average subsidy per eligible enrollee buying insurance through exchanges the law mandated is projected to be $5,300 in 2014, according to the Congressional Budget Office.

Republicans will use labor opposition to the law to continue their attacks, according Jost. Unions, which represented 11.3 percent of workers in 2012, helped Obama’s campaign in 2008 and 2012 by getting Democratic voters out to the polls.

Richard Trumka, president of the AFL-CIO, the federation of 57 labor unions with 12 million members, supported the law when it was passed.

He has called for changes to a provision that defines a full-time workweek as 30 hours instead of the traditional 40. It has led some employers to create jobs with 29 1/2 hours of work a week to avoid paying for health care.

At a press briefing last month, Trumka said he has held meetings with White House officials over the law and would support legislation to fix what the unions perceive as problems.

The AFL-CIO resolution is also likely to target several specific provisions of the law such as the penalty for employers that don’t offer health care to workers, Redmond said.

“We think that the penalty of $2,000 for employers to pay per employee may not be enough to discourage employers from not offering health care,” Redmond said.

To contact the reporter on this story: Jim Efstathiou Jr. in Los Angeles at jefstathiou@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net