November 19,2013

Press Contact:

Hatch: Julia Lawless 202-224-4515
Thune: AshLee Strong 202-228-5940
Alexander: Liz Wolgemuth 202-224-8584

GOP Senators Introduce Bill to Prevent Special Union Exemption From ObamaCare Reinsurance Tax

WASHINGTON – Following media reports that the Obama administration is once again trying to find a way to exempt unions from ObamaCare’s numerous taxes and mandates, U.S. Senators Orrin Hatch (R-Utah), John Thune (R-S.D.), Lamar Alexander (R-Tenn.) and eight of their Republican colleagues today introduced the Union Tax Fairness Act (S. 1724), a bill to prevent union health care plans, known as Taft-Hartley plans, from being exempted from the ObamaCare reinsurance tax.  

“The Obama Administration can't just circumvent Congress whenever it wants to curry favor with its political allies,” said Hatch. “Since the overwhelming majority of self-administered health insurance plans are run by unions, let's call this what it is: a political payback by the Administration to its union friends for backing this disastrous law. But the fact is, the White House doesn’t have the authority to change the law on its own and, as this bill makes clear, any attempt at a Big Labor carveout from ObamaCare must be approved by Congress.”

“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 Thune. “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. Rather than granting special backroom deals to political allies, the administration should support fairness for all by permanently delaying the law for every American.”

Alexander said, “The Obama Administration should not reward its labor union friends and allies who helped pass the health care law by giving them a carveout from the law’s worst provisions. 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.”

The ObamaCare reinsurance tax is scheduled to begin in 2014 and requires all self-insured plans to pay a tax for each person covered under a health plan. The tax was designed to provide funds to health care plans in the ObamaCare exchanges to help absorb the cost of care for people with pre-existing conditions. Thune’s bill would prevent the White House from providing a special fix for unions that would exempt them from the reinsurance tax.

In addition to Hatch, Thune, and Alexander and Hatch, the bill is co-sponsored by Senators James Inhofe (R-Okla.), David Vitter (R-La.), Mike Enzi (R-Wyo.), Ron Johnson (R-Wis.), John Barrasso (R-Wyo.), Tim Scott (R-S.C.), Saxby Chambliss (R-Ga.), and Tom Coburn (R-Okla.).   

Last week, Hatch, Thune, and Alexander also led 18 of their Republican Senate colleagues in sending a letter that urged the Obama administration not to move forward with a proposed regulation that would exempt unions from the reinsurance tax.