Exemptions to Obamcare Doled Out to President's Supporters

Wednesday, 20 Nov 2013 01:30 PM

By Jennifer G. Hickey

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While most of the nation is facing the prospect of getting healthcare through the Obamacare exchanges, the administration continually has doled out exemptions to the law to its political allies.

Labor unions, which were some of the more ardent supporters of getting the law passed, have been on the receiving end of numerous administration exemptions to the law.

The Service Employees International Union (SEIU) political action committee, for example, spent $27 million toward electing President Barack Obama and several of their local unions have been recipients of waivers to the law's provisions.

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On Tuesday, 11 Republican senators introduced the Union Tax Fairness Act, a bill to prevent the administration from granting more favors to labor by exempting union healthcare plans from the Obamacare reinsurance tax.

"Unions should not be granted a special exemption from Obamacare's reinsurance tax just because the president fears further union backlash on his signature law," said Republican Sen. John Thune of South Dakota. "These unions agreed to pay this tax when they endorsed Obamacare, but now that they are finding out what the law means for them and their plans, they want out."

The Obamacare reinsurance tax is scheduled to begin in 2014 and requires all self-insured plans to pay a $63 tax for each person covered. Thune’s bill would prevent the White House from providing a special fix for unions that would exempt them from the fee, which was intended to generate $25 billion in revenues over three years.

Republican Sen. Lamar Alexander of Tennessee said the bill insures that unions won't get a special break not available to others.

"The Obama administration should not reward its labor union friends and allies who helped pass the healthcare law by giving them a carve-out from the law's worst provisions," said Alexander. "This hefty reinsurance fee is one of the many job-killing taxes that helped pay for the passage of the law – the administration should be embarrassed that it would consider exempting their union cronies without providing similar relief to our nation's employers and faith-based and charitable organizations."

Unions have not been alone in seeking exemptions from the law they lobbied so hard to pass.

House Democratic Leader Nancy Pelosi's12th Congressional district in San Francisco — with a median income of $69,000 — secured almost 20 percent of the waivers nationwide in the first year after the president signed the law.

Nevada, the home state of Senate Majority Leader Harry Reid, also secured a partial waiver from Obamacare in 2011.

Throughout the life of the waiver program the administration rebuffed congressional efforts to bring transparency to the decision-making process. In February 2011, Republican Sen. Orrin Hatch of Utah wrote Donald Berwick, administrator of the Centers for Medicare and Medicaid Services (CMS), seeking detailed information about a rapid increase in the number of waivers granted.

Hatch noted in December 2010, that HHS announced that 222 waivers had been granted, but a month later, in January 2011, it reported a total of 733 waivers — an increase of more than 200 percent.

In 2011, HHS announced an end to the waiver program but that has not prevented the administration from exempting special groups from Obamacare mandates.

In January of 2012, the Department of Health and Human Services announced that a total of 1,231 companies and labor unions were granted waivers from the Obamacare's restrictions on annual benefit caps.

In June, the administration ruled that native Alaskans and American Indians would be exempted from having to purchase healthcare coverage under the Affordable Care Act. Prior to the ruling, only members of federally recognized tribes and shareholders in Alaska Native corporations were considered exempt.

In September, the entire state of Arkansas secured a Medicaid waiver.

The most controversial distinction involves Congress itself. While Congress and their staff are technically not considered "exempt" from Obamacare, they do enjoy favored treatment as a result of a legislative fix passed in 2010. Like other federal employees, congressional staffers are covered by the Federal Employee Health Benefit Program (FEHBP), which picks up two-thirds of their cost of insurance.

An amendment to the Afforable Care Act, sponsored by Republican Sen. Charles Grassley of Iowa, required Congress to give up their FEHBP insurance and enter the insurance exchange. But a ruling by the Office of Personnel Management (OPM) permitted Congress to keep their employee subsidies under the plan and cited as justification a legal loophole written into the law itself.

Grassley maintains his intent was to make Congress play by the same rules as average Americans, but that was not the result. Republican Sen. David Vitter of Louisiana continues to pursue a legislative remedy that would reverse the OPM ruling, but it has failed to advance in the Senate.

Unions were initially among the biggest supporters of Obamacare but since its passage their tune has changed and they have employed the same lobbying resources toward seeking waivers and exemptions from Obamacare that they did in securing its passage.

The lobbying campaign to exempt unions from the reinsurance fee has been going on for months. In June, Joseph Hansen, president of the 1.3 million-member United Food and Commercial Workers International Union, wrote an editorial in The Hill calling on the administration to use the regulatory process to achieve that goal.

"We’d be open to a legislative fix, but ultimately this is the administration's responsibility. They are leading the regulatory process. It's their signature law," wrote Hansen.

In September at its annual convention, the AFL-CIO adopted several resolutions related to Obamacare, including a proposal to eliminate the reinsurance fee and giving union plans access to tax credits for lower-income members.

In September, the administration rebuffed union efforts to allow their workers to receive premium tax credits, but there were news reports that the administration was seeking alternative means to address union concerns by giving into another demand — relief from the punitive reinsurance fee.

Urgent: Do You Approve Or Disapprove of President Obama's Job Performance? Vote Now in Urgent Poll

On October 30, HHS took a first step by issuing a proposed rule that included a provision to exempt "certain self-insured, self-administered" plans for Obamacare's temporary reinsurance fee in 2015 and 2016.


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