Americans for Tax Reform compiled a list of tax increases associated with Obamacare, and union workers in particular are staring at a whopper in a few years – a hefty tax on premium health insurance plans that could easily cost them $1,000 per year. According to ATR:
Obamacare Tax on Union Member and Early Retiree Health Insurance Plans: Obamacare imposes a new 40 percent excise tax on high cost or “Cadillac” health insurance plans, effective in 2018. This tax increase will most directly affect union families and early retirees, who are likely to be covered by such plans. This Obamacare tax will be levied on insurance policies whose premiums exceed $10,200 for an individual and $27,500 for a family. Middle class union members tend to be covered by such plans in states like Ohio, Pennsylvania, Wisconsin, and Michigan.
Lots of Illinois families will be affected by this, too. Premiums on the more generous health insurance programs are expected to be well over the limits employers and employees are allowed to spend under ObamaCare, triggering the 40 percent tax. In the course of collective bargaining, many unions traded higher wages and other perks in order to get these benefits, and now the value of these generous health insurance plans will be dramatically reduced because of the high-tax price tag they will carry.
Workers might wish that they had gotten plain old pay raises instead, or that ObamaCare had never been passed. But if history is any guide union officials’ commitment to big government programs, and to the Democratic Party, will prevent them from strongly challenging this provision, let alone ObamaCare itself. Workers need to keep this in mind: the union establishment has political allegiances that are prone to get in the way of their looking out for workers bests interests.
Paul Kersey is Director of Labor Policy at the Illinois Policy Institute