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A Mixed Bag

How Will Obamacare Affect Unionized Workers?

by DAVID MACARAY

With most major provisions of the Patient Protection and Affordable Care Act (PPACA), commonly and often pejoratively referred to as “Obamacare,” set to go into effect in January 2014, union members across the country have been wondering how the PPACA will affect the health care benefits already laid out in their union contracts.

Although it’s a bit unnerving how few people in positions of authority (plant managers, HR reps, health care administrators, etc.) seem to know exactly how the PPACA will work, the answer to the question, “How will Obamacare affect my union health care benefits?” is fairly clear. The answer is that it will likely have no effect whatsoever.

As a general rule, contract language supersedes everything. Unless the language in question is in clear violation of state or federal law, it is going to trump all else. Indeed, that’s not only the whole point of a binding agreement, it’s the virtue of a union contract, the beauty of an employee having access to the collective bargaining process, and the advantage of not being treated like a doormat.

A recent article in the Washington Post raised what might otherwise have been a red flag. The Post reported that UPS announced that, as of January 1, it was no longer going to allow its employees to provide health care coverage for working spouses. If you had a wife or husband who was working elsewhere, you could no longer cover them. The change is expected to affect approximately 15,000 workers.

Because the PPACA requires employers (with 50 or more employees) to provide affordable health insurance, UPS management saw an opening and decided to exploit it. It was an opportunity to get out from under what they considered a fairly significant financial burden. But the article was careful to note that this applied only to its non-union workforce, and had nothing to do with its unionized employees (mainly Teamsters).

In theory, labor unions have the ability to control their own destiny via the collective bargaining process by customizing and adapting a contract to fit their specific needs. This is not something that came easily; it took organized labor more than 100 years to carve out that niche. So what’s the lesson for those non-union UPS workers and their spouses who just received the bad news? Not to be glib, but the lesson is that they need to organize.

Because much of this PPACA package is provisional, and because, presumably, everyone is going to be looking for loopholes and exceptions, there’s no way of knowing for certain what kind of health insurance these employers are going to provide. Yes, the coverage is mandated by federal law, but how good will it be? Only when you negotiate a medical plan at the bargaining table are you assured of knowing what you’re getting (and even then it’s often unclear).

But there’s some irony here. Prior to the PPACA, management could announce that it was no longer going to provide union employees with medical coverage. Although a company risks a strike by pulling a stunt like this, it’s been done in the past, and with replacement workers looming as the wild card, some companies have gotten away with it without going to war. A weak union, or a union dealing with a struggling company, wouldn’t have much of a choice.

However, with the PPACA in place, companies won’t have the option of unilaterally eliminating medical coverage. Removing this expensive item from the contract will no longer automatically result in cost savings because federal law will require that they provide it in any event.

And based on how most businesses regard government mandates, it’s safe to say they’d rather take their chances with a union bargaining team. Of course, as always, the bottom-line is going to dictate what happens in the health care arena, and if the PPACA card can be used as leverage, management will definitely play it.

Oddly, there’s a flip-side to this. It may turn out that fewer workers want to join a union once they realize companies are required to provide affordable health insurance. In truth, the main reason some people join a union is to have access to health insurance, so this scenario isn’t that farfetched. In any event, one thing is clear: Union-wise, Obamacare could very well be—as so many have predicted—a mixed bag.

David Macaray, an LA playwright and author (“It’s Never Been Easy: Essays on Modern Labor”), was a former union rep. He can be reached at dmacaray@earthlink.net