NEWSROOM

The White House Jan. 14 made a deal with labor unions behind closed doors that will exempt some union members from a tax on their high-cost insurance coverage, or “Cadillac” plans, for five years longer than other employers.  The tax will apply to the type of health insurance that often has the lowest deductibles and excellent benefits that cover even the most expensive treatments.  

The excise tax, contained in the Senate version of health care reform (H.R. 3590), would apply to most health plans beginning 2013, but will be delayed for labor unions until 2018, under the compromise.  In exchange, the union leaders agreed to soften their opposition and support the health care legislation.  

“This health care bill is full of pay offs to politicians – and now special interest groups – and continues to be a blatant assault on small business,” said Geoff Burr, ABC vice president of federal affairs. “If this president and the Congress are serious about reforming the health care system, they should soundly reject any special interest provisions in this legislation that add up to a political payoff.”  

In addition, ABC along with 24 other organizations, Jan. 8 sent a letter to Senate Majority Leader Harry Reid (D-Nev.) and Speaker of the House Nancy Pelosi (D-Calif.) opposing the Merkley amendment and asking for its removal.  Language in the amendment singles out the construction industry by requiring firms with an average of five or more employees during the previous year and whose annual payroll expenses exceed $250,000 to pay for health insurance for their workers or be subject to a federally imposed fine of $750 per employee.  Comparatively, H.R. 3590 generally exempts other small businesses with fewer than 50 employees from the fines.    

“Employers’ benefit packages reflect the reality of their business models, and they proudly offer their employees the best health insurance cove rage that they can afford,” the letter stated. “It is unreasonable to presume that small business owners can bear the increased cost of these new benefits simply because Congress mandates that they do so.  We strongly urge you to support the removal of this arbitrary and onerous provision that needlessly singles out small construction industry employers.”  

The Jan. 19 victory by Sen. Scott Brown (R-Mass.) in the race to fill the seat vacated by the late Sen. Edward Kennedy (D-Mass.) further complicates the path to passage of major health care reform.  On Jan. 20, Senate Majority Leader Harry Reid announced that there will be no further votes on health care in the Senate until Senator-elect Brown has been seated.