The Electrical Worker online
May 2014

Fix It, Don't Repeal It
A Conversation with
International Secretary-Treasurer Sam Chilia
on the Future of Health Care
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Four years after the passage of the Affordable Care Act, also known as Obamacare, health care remains one of the most pressing, and contentious, policy issues in the United States.

Local union leaders, health and benefit fund managers and rank-and-file members have many questions: how does my plan fare under the ACA and will it help or hurt me and my family? Will prices continue to rise? What role will the ACA play in the 2014 elections? What fixes need to be made?

The Electrical Worker sat down with International Secretary-Treasurer Sam Chilia to talk about these and other health care questions.

EW: The ACA has come under criticism from many as of late, from the botched rollout of the health care exchanges to the criticisms from many unions, including the IBEW, about provisions in the legislation that could harm some of their health plans. What's your view?

SC: Before 2009, health care costs were rising by double-digits every year. Before the ACA, our health care system was totally unsustainable and would have eventually bankrupted our plans and employers. Doing nothing was not an option, just as returning to the pre-ACA system isn't an option now.

I have many criticisms of the ACA, which I will share with you later, but I first want to mention the good things the health care bill means for working families. Those with pre-existing conditions can no longer be discriminated against when buying health insurance. Lifetime caps on care are gone. Young people starting out in the world — those most likely to have no coverage — have until the age of 26 to stay on their parents' plans. The expansion of Medicaid is a lifesaver for millions of struggling Americans who can't afford decent health care. And despite all the technical problems with the website, more than 7 million Americans now have affordable, quality coverage. And health care costs, which were spiraling out of control, have started to taper off.

It's always been a principle of the labor movement to fight for health care for all Americans. And the ACA has made it possible for millions to be covered. Plus it is driving down costs, which in the long run will help keep our plans viable. That's why we supported the bill in the first place and that's why we continue to call for fixing the ACA, not repealing it.

EW: So what needs fixing?

SC: For us, the biggest issue is the negative effects the ACA will have on multiemployer plans. Multiemployer, or Taft-Hartley plans, provide affordable and portable health coverage for many of our members, particularly in construction. They are jointly operated by the IBEW and management. By joining with other employers in the plan, contractors reduce cost and spread risk across a larger pool.

The Affordable Care Act threatens multiemployer plans in a few ways.

First off, the employee threshold at which an employer is required to provide health benefits is 50, which is too high. More than 90 percent of construction contractors employ fewer than 50 workers, which gives our competitors an incentive not to provide employee health care, putting additional pressure on signatory employers that do.

Second is the reinsurance tax. Beginning this year, either federal or state authorities will assess a fee for each person enrolled in a plan outside of an exchange. The insurance company and our multiemployer plans will have to pay this fee and it is likely the insurer or plan will pass on the cost to the employer and ultimately our members.

The fee helps high-risk individuals purchase insurance on the market, but it's an additional burden on our plans and serves to subsidize employers who don't want to cover their workers by taking money out of the pockets of employers who do the right thing.

Thirdly, despite being one of the most successful health care models in the private sector, multiemployer plans aren't considered qualified health care plans under the ACA. That means that our members don't qualify for subsidies to help offset costs.

Additionally, there remains an immense amount of confusion on exactly how the application of ACA affects multiemployer plans. We're getting very little guidance and slow direction from the federal government.

I would have rather seen President Obama and Congress carve out a place for multiemployer plans in the ACA, because it's a model that works and works well.

We tried everything, including visits by President Ed Hill to the White House to meet President Obama face to face. It doesn't look like the changes we and many other supporters of multiemployer plans want are coming anytime soon, but our political/legislative team is still ready to work with officials in Congress from both sides of aisle to help fix some of these problems.

EW: Faced with a lot of conflicting information and uncertainty about the ACA, what steps should business managers and health and welfare fund managers take?

SC: My suggestion is to tread lightly and think carefully. It might seem like it would be easier to walk away from the hard work of administering a health care benefit plan by giving our members cash to go buy their own plans on the exchanges. Some of our employers might even suggest this.

That would be a huge mistake.

The ACA does not change the fact that health coverage remains a mandatory subject of bargaining, so there is no reason to abandon our plans even if the employer wants to.

Even with the additional pressures from the ACA, our multiemployer plans remain one of the best options out there, providing high-quality coverage that is almost always superior to plans offered through the exchanges.

Also, dumping your plans will result in significant tax consequences as plans on the exchanges will be paid for with after-tax dollars. This will cost employers and employees, and our members, more in taxes and provide no additional benefits.

There is no good reason to give up your health care plan in favor of the exchanges.

Also keep in mind the IBEW/NECA Family Medical Care Plan, which is an increasingly attractive option for locals, contractors and companies alike. (See "IBEW/NECA Health Plan Sees Growth" sidebar below)

EW: Republicans have made repealing Obamacare a key element of their political platform. What do you think about this?

SC: As I said earlier, the old health care system was broken and unsustainable. It left millions without coverage while slowly bankrupting private-sector plans through skyrocketing inflation. Going back to those days would be more destructive for our plans than anything the ACA is doing. There are good points and bad points in Obamacare, and our focus is on fixing the bad parts. We are ready to work with elected officials from both parties who are serious about developing a comprehensive plan that provides affordable and quality coverage to every American while protecting private-sector health care models that work. Obamacare was a start, and, whatever its faults, we need to keep moving forward, not backward.




IBEW/NECA Health Plan Sees Growth

Strength in numbers. That's the idea behind unions: bringing together many to act as one to improve working conditions and bargain for better wages and benefits.

And it's also the philosophy of the IBEW/NECA Family Medical Care Plan. By pooling the resources of IBEW members across the United States, the plan shares risk while increasing bargaining power with insurance providers to reduce costs.

Since its formation in 2006, the plan has seen strong and steady growth as increasing health care costs and uncertainly around the Affordable Care Act make it an increasingly attractive option for business managers, employers and health and benefit fund managers.

Last year, 33,000 individuals were covered under the Family Medical Care Plan. Today, it stands at more than 56,000, an increase of approximately 70 percent.

Looking at the benefits, it's easy to see why. The plan helps IBEW locals and signatory companies in two ways.

First, it cuts down on administrative costs and overhead. Right now, every health and welfare fund requires its own professional staff to administer it. The Family Medical Care Plan has an administrative staff already in place, requiring no additional hiring of consultants or staffers.

Second, by joining a national plan, locals and employers can leverage size to boost savings.

"When you can provide a big enough pool, you're talking huge savings," said Larry Bradley, secretary-treasurer of the National Electrical Benefit Fund. Bradley also serves as executive director of the Family Medical Care Plan. "And the proof in the pudding is in the numbers."

Bradley says that the average rise in plan contribution rates through 2015 will be 5 percent yearly, which is less than half the increase seen in most other private insurance plans.

"I've talked with locals that are seeing double-digit increases, even those in the 20s, 30s and even one more than 40 percent," he said.

It is all too easy for one major illness to wipe out a small or medium-sized fund within days. Plans with fewer than 1,000 members are particularly vulnerable. Because of its size, the Family Medical Care Plan is not required to carry stop-loss insurance, which smaller plans must have as protection against catastrophic claims.

Originally started for construction locals, the plan has grown to cover members in multiple branches, including several utilities.

IBEW signatory companies Verizon Communications, Frontier Communications and Rockwell Collins have signed up.

IBEW members working for Verizon in Pennsylvania and parts of California are some of the newest members of the Family Medical Care Plan.

"Verizon agreed to the plan because it's less expensive and provides more coverage, simple as that," said Telecommunications and Broadcasting Department International Representative Bob Erickson. "It's a better deal for our members and Verizon."

While the plan will initially only cover approximately 500 IBEW members working for the company, Erickson said locals will continue to advocate its adoption system-wide. "It's a start and we hope it can become a model for all IBEW members at Verizon."

Bradley urges all IBEW leaders to include the health plan in their negotiations. "The plan is a tool provided to them by the IBEW and NECA," he said. "It's free to take a look and to find out how it can help them."


The IBEW/NECA Family Medical Care Plan is seeing strong and steady growth as IBEW locals and employers from across the United States are turning to it to meet their health care needs.

Photo used under a Creative Commons license from Flickr user Michael B.