Topics: Labor Unions

Emerging deal would be a victory for big labor

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Beltway Confidential,Philip Klein,Labor unions,Obamacare,Republican Party,Democratic Party,AFL-CIO,Government Shutdown

Unions would come out as one of the winners in an emerging deal between Senate Republicans and Democrats to resolve the budget impasse that has triggered the government shutdown now entering its third week.

The proposed deal would include a one-year delay in a fee strongly opposed by unions that was to be assessed against health insurance plans starting in 2014, according to Politico.

The relevant provision of President Obama's health care law, the Transitional Reinsurance Program, was set up as a way of preventing any given insurer from getting stuck with a disproportionate number of very sick individuals with high medical expenses now that they're forced to offer insurance to all comers.

The intention was for the federal government to collect $25 billion in fees between 2014 through 2017 to fund partial reimbursement of insurers for taking on added risk. The fee was supposed to be $63 per plan participant in 2014.

But unions strongly opposed the fee as a tax on the generous health care benefits they won through negotiation with private sector employers.

Last month, the AFL-CIO passed a resolution calling for the elimination of the reinsurance fee, arguing that, along with a tax on high-value health care plans scheduled to go into effect in 2018, the reinsurance fee "will drive the costs of collectively bargained, union administered plans, and other plans that cover unionized workers, to unsupportable levels, resulting in pressure to shift costs to workers, cut wages, and to agree to unacceptable high deductible plans."

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