Waiver on the way? Union cuts health care coverage for dependents

At first read, this seems to be a complex case, so let’s not all jump on the “it’s Obamacare” bandwagon, even though part of the problem is the new health care legislation. A “low-wage” health attendant union – an affiliate of the Service Employees International Union (SEIU) – will be dropping coverage for its member’s dependents. Period.

As I read it, employers contribute a specific amount towards health care costs that are collected and pooled by the union and the union buys the health care insurance plan from an independent insurance company. As I’ve written for quite some time, health care costs are going up, resulting in higher premiums. In this case, the union complains about higher costs as a result of the mandate to cover children up to the age of 26 and limited resources.

From the Wall Street Journal.

The union fund faced a “dramatic shortfall” between what employers contributed to the fund and the premiums charged by its insurance provider, Fidelis Care, according to Mitra Behroozi, executive director of benefit and pension funds for 1199SEIU. The union fund pools contributions from several home-care agencies and then buys insurance from Fidelis.

“In addition, new federal health-care reform legislation requires plans with dependent coverage to expand that coverage up to age 26,” Behroozi wrote in a letter to members Oct. 22. “Our limited resources are already stretched as far as possible, and meeting this new requirement would be financially impossible.”

Behroozi estimated that the fund faced a $15 million shortfall in 2011 and more in the following years for the coverage of workers’ children.

Along with blaming the new legislation, the union is taking shots and the other regulatory big brother they need to deal with … the State of New York.

The article does not dive into questions I have, including if the union members contribute any amount to their plan, what type of coverage they have – Health Savings Account or the more traditional co-pay plans – and how many union management full-time positions ‘manage’ and ‘administer’ the plan for members.

Note the first sentence of the article, with my emphasis in bold.

One of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants, union officials said.

Right of the bat, the union is describing their members as ‘low-wage’ workers without defining what a ‘low-wage’ is. Spin the story … the people who take care of the elderly and sick are getting screwed.

Again, this is a complex case since the feds, state, and Medicaid are all involved. The union is blaming the state and the state is saying they did not mandate what plan the union selected in the past. It comes down to this…

“We hope the state of New York will do the right thing and provide the funding necessary for this most vulnerable population of direct caregivers,” the union said in a statement.

Without a doubt, caregivers do have a tough job, many people do. Does that mean they automatically qualify to demand taxpayers pick up the cost of their escalating health care costs?

7 replies
  1. GdavidH
    GdavidH says:

    Steve,

    Considering this other line from the article…

    " The union fund pools contributions from several home-care agencies and then buys insurance from Fidelis."

     What the he!! does this statement mean???

    “We hope the state of New York will do the right thing and provide the funding necessary for this most vulnerable population of direct caregivers,” the union said in a statement.

    If the union gets the funds from either the home care agencies, as employers, or (as I doubt) union dues, does the union really believe the state should make up the shortfall??? Is that in their contract???

  2. GdavidH
    GdavidH says:

    By the way… I don't think there is a waiver on the way. I think there is a bailout on the way.

     The union really doesn't want to drop the kiddies from the ranks, it just wants someone else to pay for it.

  3. Tim-in-Alabama
    Tim-in-Alabama says:

    It's important that unions cut expenses by ditching their workers' medical insurance so that the unions have more money available to lobby for better treatment of workers.

  4. Dimsdale
    Dimsdale says:

    Tim: that says it all.  When you consider the millions (billions?) that the unions squander to buy politician's favor, you have to start wondering if that money would have been better spent on the member's health care, severance pay, strike pay etc.

  5. RoBrDona
    RoBrDona says:

    I wonder if this is a carefully designed test case using a weaker SEIU affiliate that does not have much political power, but can be seen as a fringe "public service" union to see firstly how Obama's minions respond, and also what pushback there is both at home and in the House and Senate. It would make sense that unions would want to know what constitutes a union eligible for either bailouts or exemptions – so that they have more to lobby with as Tim says. 

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