Employers can’t be instantly ready for how health reform will transform their health plans in 2014; they have to do all the heavy lifting in 2013 in order to achieve preparedness, an attorney from the Epstein Becker & Green law firm said on Dec. 19. He advised employers to see health reform-driven coverage changes in relation to union contracts and organizing efforts.
Coordinating Plan Changes with CBAs
Employers that have FTEs under a union contract will have a trickier task, because health reform’s new definition of FTE probably doesn’t fit in the framework used in CBAs, Frank C. Morris, Jr., an attorney in EBG’s Washington office, said. He said coordinating health plan changes with CBAs will be important for some employers.
Some plans are going to lose the ability to tailor benefits for the goal of recruitment, retention and union demands. Others will need to scale back extras in order to comply with new areas of coverage required by reform, or to keep health costs under control. But they’ll have to do so in a way that does not alienate employees or galvanize unions.
In such instances, employers may reopen CBAs (rather than making unilateral changes), meeting with union reps and discussing targeted changes to the CBA that are limited to just provisions required to comply with health reform, without disturbing the other areas (wages and hours, etc.) worked out with the union.
Morris said one option is a short-term CBA, in effect during 2013 only, during which employers resolve the issues, and come into compliance with health reform rules in 2014.
Be Careful of Unions When Eliminating Excess Coverage
Employers that are mulling over whether to drop health coverage (or if they have to change or modify coverage to decrease plan costs) might want to let the union know whether they can achieve concessions in the CBA if all sides agree that it is necessary to maintain the health plan.
However, employers need to be careful about moves to either drop or scale back coverage, Morris continued. Unions could galvanize around this issue to increase organizing. If employers lessen the benefits in their plans, or drop health coverage altogether, unions may become emboldened to recruit members.
He said he expects this will be the case with lower-paid workers, presenting unions with an opportunity to go after part-time employees who don’t have coverage: “If you drop coverage, higher paid employees who would not typically perhaps be as fertile ground for organizing efforts can again become more fertile ground because of the fact that they are very unhappy over the loss of employer provided coverage, as a result of the decision that may be best cost decision but not the overall most sensible decision for the employer.”
Morris also mentioned (outside the union context as well) other risks of dropping coverage: (1) the loss of employees to competitors; (2) a decrease in the work productivity from workers who no longer have quality health care; and (3) the loss of tax-preferred status of benefits.
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