Senate Shutdown Proposal Would Exempt Unions From Mandatory Obamacare Tax For One Year
October 16, 2013 by Ben Bullard
The Senate version of an agreement to end the Federal government shutdown includes a concession to appease unions whose nonplussed leaders became more critical of the Affordable Care Act — a piece of legislation they once ardently supported — in the run-up to its Oct. 1 implementation.
According to The Hill, the Senate agreement would delay an Obamacare tax — the so-called “reinsurance” fee — by one year.
Originally conceived as a three-year implementation tax, the reinsurance fee is designed to stabilize individual Obamacare premiums by generating revenue that is supposed to be pumped into the funding pool as more sick people enroll for new insurance policies, which by law must accept patients with pre-existing illnesses.
From The Hill:
The reinsurance tax figured prominently in discussions at a recent AFL-CIO convention, where workers passed a resolution demanding changes to ObamaCare.
The White House recently denied labor’s top priority on ObamaCare, ruling that union health plans are not eligible for the new subsidies because they are already helped by the tax code.
Democrats could be pushing to delay the reinsurance fee for one year as an olive branch after that apparent slight, though it could also create trouble for insurers on the marketplaces.
Even though the tax is mandatory for all group health plans, unions have successfully twisted the arms of many of Obamacare’s longtime Congressional supporters, persuading Senate backers of the exemption that union enrollees’ policy premiums will needlessly increase — despite the fact that the tax is mandatory for all group health plans.
Under the law, companies that offer health coverage are required to pay a reinsurance fee of $63 per covered person next year, with the fee tapering off over the subsequent two years.