Will Obamacare hurt union enrollment?

One little-discussed side effect of ObamaCare is that it could undermine union membership by reducing the incentives for some unions to offer health benefits.

The issue here is how the law deals with multiemployer health plans, which cover as many as 26 million Americans, and are especially popular with unions whose members frequently work irregular hours for multiple customers. ObamaCare requires these plans to comply with a number of regulations that are likely to drive up costs, but it doesn’t allow employers who provide benefits through multiemployer plans access to subsidies or tax credits. The only way for many of those union members currently covered by multiemployer plans to get subsidies would be for the unions to stop offering those plans.

So as the law stands now, a lot of unions that rely on multiemployer plans will end up having big incentives to drop health benefits and instead let members buy subsidized insurance through the law’s exchanges. The potential cost savings aren’t trivial: Last year, a representative from a multiemployer plan organization told a labor issues news site that the difference could easily be as much as $5,000 per employee annually. With savings like that on the table, it’s going to be very hard to justify continuing to pay for health benefits if union members can get health insurance elsewhere.

But here’s the thing: Labor unions don’t want to drop health benefits for their workers, in no small part because providing health benefits is a big part of what they exist to do. If they don’t offer benefits, it’s harder to attract and retain union members.

Reason

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