On July 2, the Treasury Department announced that mandatory employer coverage, reporting, and penalties would be delayed from January 1, 2014, until January 1, 2015. However, the so-called “individual mandate” will remain in effect as of January 1, 2014.

What is the impact of this one-year transitional employer relief on Trust Funds and Unions?

First, the transitional relief changes nothing for small employers (under 50 full-time employees or full-time equivalents). There was no obligation for these employers to provide coverage before the relief, and no obligation to provide coverage after the relief.

Second, the one-year transitional relief provides larger employers (50 or more full-time employees or full-time equivalents) another year to implement certain changes:  making their health plan “affordable” (i.e., no more than 9.5% of an employee’s salary for the employee’s self-only coverage); making  their health plan meet the minimum value test (at least 60/40); and tightening up eligibility rules and waiting periods, if necessary.

Third, the truth is that most Taft-Hartley Trust Funds already provide minimum value benefits, and most Union contracts already make it affordable, so at most, there may be a longer grace period for adjusting eligibility and waiting periods.

So overall, the one year delay will probably simply do what it is meant to do:  give the government a chance to streamline reporting and enforcement procedures, and give employers another year to figure it all out, perhaps including time to come up with more clever evasive maneuvers.

But, there is a potentially HUGE opportunity for UNIONS in this delay:  the individual mandate is still in effect as of January 1,2014. That means every citizen in the land has to secure health care coverage. This could be a great organizing opportunity for Unions: “Hey, you have to get coverage—join the Union and we will negotiate coverage for you.” Millions of workers will be looking for decent, affordable health care coverage to avoid paying fines and penalties – the issue for Unions is whether they can take advantage of this moment.

By Bill Sokol | July 8, 2013

Legal Developments