Report on AFL-CIO Convention – Day 4

The AFL-CIO convention ended yesterday, but not before some fireworks over the Affordable Care Act (ACA). Certain aspects of the healthcare law – particularly ACA’s impact on multi-employer healthcare plans – have caused a great deal of consternation for unions. The concern over the law’s effect on unionized employees appears to have come to a head during the final day of the convention, where after three days of closed-door meetings, delegates adopted a resolution outlining their apprehension about the healthcare law and making suggestions for change. Resolution 54 was submitted by the Building and Construction Trades Department, the International Union of Operating Engineers and the American Federation of Teachers.  The Resolution states that “federal agencies administering the ACA have interpreted the Act in ways that are threatening the ability of workers to keep health care coverage through some collectively bargained, non-profit health care funds.”

Among other ACA fixes, Resolution 54 calls for the following actions:

  • non-profit multiemployer plans should have access to the ACA’s premium tax credits and cost-sharing reductions on behalf of working families;
  • the employer responsibility rules should be fixed by applying a full employer penalty for failing to provide affordable comprehensive coverage to workers who average 20 or more hours per week and adding an employer penalty on a pro rata basis for employees who work fewer than 20 hours per week.
  • the employer responsibility rules should be fixed further by extending employer responsibility requirements to more employers, especially to construction companies with five or more employees as was provided by the Merkley Amendment included in the [ACA];
  • employers that attempt to shirk their responsibility in its entirety by dumping low-income workers into Medicaid should be penalized;
  • the AFL-CIO will strongly oppose taxing workers’ health benefits;
  • the AFL-CIO supports the preservation of collectively bargained plans, union administered plans, and other plans that cover unionized workers, by eliminating the ACA Excise Tax, Reinsurance Fee and all other fees;
  • federal agencies responsible for implementing the Act [should] exempt supplemental welfare benefit plans from the PCORI and reinsurance fees.

The fierce and prolonged debate over this resolution exposes a major rift within the labor federation; some unions lobbied strongly for fixes while others were more circumspect.  Prior to the resolution vote, White House officials had reportedly called upon union leaders to table the resolution. The fact that the White House felt the need to respond to unions’ concerns indicates how serious a threat the unions’ criticism is perceived to be.

In non-healthcare news, union leaders hailed Sallie Mae becoming the 50th corporation to cut ties with the American Legislative Exchange Council (ALEC), the membership organization of state legislators that favors federalism and conservative public policy solutions. The ALEC boycott is based on ALEC’s support of for-profit colleges and universities. 

Delegates also adopted a funding resolution that discusses the possible per capita tax increase on their affiliated members.  The resolution states:

While we have had many unions return to our Federation since 2005, the AFL-CIO, itself, has not had an increase in per capita tax in eight years, during which time the economy has experienced inflation of 19%. But the AFL-CIO is by no means alone in this regard; many of its national and international union affiliates, as well as its state and local central bodies, are facing rising costs while they have lost membership, and consequently dues revenue as well.

The federation has made notable progress in spending its resources more efficiently, and it needs to continue to seek and achieve economies of operation. It also needs to identify current programs of low priority that could be cut in order to refocus on the priorities set by the Convention.

The tax increase recommendation will be discussed at the February 2014 AFL-CIO Board meeting in Houston.  It has been speculated that the AFL-CIO chose a Texas location because it is one state in which the organization would like to make headway.  A large number of janitors became unionized in Texas as the result of an aggressive corporate campaign.  In addition, Houston has a unionized city workforce headed by the SEIU, and has a significant concentration of large medical providers, an industry in which unions have achieved a marginal degree of success in recent years. 

The reinvigorated AFL-CIO is now prepared to transform these resolutions into action.  A reconstituted Labor Board and strengthened Department of Labor will likely aid these efforts.  Just how many of the AFL-CIO’s resolutions come to fruition remains to be seen.  For more information, see Littler’s Workplace Policy Institute – A Special Labor Day 2013 Report: Is Labor Poised For Rebirth?

Photo credit: Andyworks

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.