The BCTGM, together with the AFL-CIO, has gone on the offensive to convince Congress and the Obama Administration, that a 40 percent excise tax on so-called “Cadillac” health care plans will have a detrimental effect on union workers who have sacrificed to maintain quality health care coverage for themselves and their families.
The tax is part of the Affordable Care Act (ACA) and would force employers to pay a 40 percent tax on health benefits that total more than $10,200 for individual health plans and family plans above $27,500. Several surveys suggest that one-third of employers will be hit by the tax in 2018, and possibly growing to 60 percent by 2022.
Taxing health care benefits would represent a major shift in a generations-old tax policy. For more than 50 years, the U.S. government has encouraged companies to offer health insurance by allowing tax deductions in exchange for providing workers with coverage.
Implementation of the 40 percent excise tax will lead employers to erode current health care benefits or shift a greater burden of health care costs onto employees to avoid having to pay the tax.
According to BCTGM International President David Durkee, those who developed the excise tax do not seem to understand the collective bargaining process. “What the framers of this law did not seem to comprehend is that our local unions negotiate health care benefits as part of a larger compensation package; money is split between wages, pension and health benefits,” notes Durkee. “Our members pay for these benefits at the bargaining table. Often, it comes at the expense of more significant wage or pension increases. This is an attack on their hard-earned benefits.”
The BCTGM has been lobbying members of Congress to repeal, or severely limit the excise tax. There are several bills in Congress to repeal the excise tax. Organized labor, including the BCTGM, supports the “Middle Class Health Benefits Tax Repeal Act of 2015” (H.R. 2050), sponsored by U.S. Representative Joe Courtney (D- Conn.).
While the Union is hopeful that one of these bills will pass, work on curtailing the tax continues on other fronts. The BCTGM recently filed official “Comments” with the Internal Revenue Service (IRS) in an attempt to have the food processing industry (including tobacco-related workplaces) and grain milling industries exempt from the tax or to significantly raise the annual limits for those industries. It is our contention that BCTGM industries should be considered “high risk professions.” Employers in “high risk professions” will not have to pay the tax or pay it on a much smaller scale.
In the BCTGM’s comments to the IRS, Durkee points out that the Food Manufacturing classification actually has higher rates of injury and illness than other industries on the list. For example, workers in food manufacturing are twice as likely to need days away from work or job restrictions due to injury as workers in the mining industry, which is on the list.
“The ACA should not be funded on the backs of working people. Our members have already paid for these benefits and should not have to pay twice. We will do everything we can to make sure this tax will not be implemented in 2018,” concludes Durkee.