Obamacare and Act 111 - What's in Store for 2014?

Obamacare and Act 111 – What’s in Store for 2014?

By Richard G. Poulson

One of the major components of the Affordable Care Act is the introduction this year of “Marketplaces” or “Exchanges” through which individuals can purchase health insurance directly. The ACA marketplaces opened this year and started accepting applications in late 2013.

The availability and different levels of marketplace coverage has caused some confusion among police officers, firefighters and public employers regarding the continued availability of their current health plans. Over the past months, many local police and fire unions have had to defend against misguided attempts by their employers to change their health benefits, allegedly due to an “Obamacare mandate.”

In each instance, the question has been the same – can the city change our plan because of Obamacare? And in each instance the answer has been the same, too – NO, NO and NO! Act 111 requires bargaining over wages, benefits and other conditions of employment. Health insurance is a mandatory subject of bargaining, meaning that your employer cannot cut health benefits over the union’s objection. That was the law before the ACA and it remains the law today. So whether municipal employers are getting bad advice from consultants or sneaky advice from management lawyers on this issue, the fact remains that your employer must bargain over any proposed change to your health insurance.

But what about the marketplace plans? The fact that the ACA makes basic coverage plans available for individual purchase doesn’t mean that an employer can force you one of those plans. Think of it this way. Just because there is a minimum wage doesn’t mean that’s all a police officer should make, right? The same rule applies to the ACA. Don’t let your employer fool you into suffering benefit cuts for the misguided reason that “Obamacare requires it”. Not so.

As for the real ACA issues? The Cadillac excise tax on high-costs plans looms far on the horizon (in 2018), but that will remain on the back burner in most police and fire negotiations until at 2016. And it’s not nearly as scary as some would have you believe.

But perhaps the biggest issue on the ACA front is the fact that since the law was passed annual health insurance premium increases have dropped dramatically. Annual premium increases of 10% or more were commonplace before 2009 (they occurred 75% of the time). Today we are seeing those increases occur less than 15% of the time. That’s a big deal. As for the healthcare costs generally, the last 5 years have seen the slowest growth in healthcare premium costs in decades! You can credit the ACA or not, but healthcare costs pose less of a threat to municipal budgets today than they were in 2009. If your municipal managers forgot to tell you that in your contract negotiations last year, I suggest that you remind them.

Finally, and as always, if you need legal assistance or have questions as you try to navigate insurance issues in the post-ACA landscape , you should not hesitate to seek the advice of labor, employment and benefits attorneys at Willig, Williams & Davidson.

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