WGA East Calls for Union Exemption To Obamacare’s ‘Cadillac Tax’

The WGA East today called for all union health plans to be exempted from the Affordable Care Act’s so-called “Cadillac Tax,” a 40% nondeductible excise tax that is scheduled to go into effect in 2018 on employers who provide high-end health benefits to their workers.

In comments filed today with the IRS and the U.S. Department of Treasury, the guild said that “the Cadillac Tax would strip away benefits from the basic package of compensation guild members have struggled for decades to win for themselves and their families.”

WGAE contends that “unions and employers negotiate contributions to multiemployer health plans that reflect the economic reality of a particular industry and allocates compensation in a way that meets the employees’ actual needs and aspirations.” The guild said that “to strip hard-working men and women of these benefits” will “deprive them of the benefit of their bargain.”

The Cadillac Tax was added to Obamacare on the theory that high-end union health benefit plans are a form of compensation in lieu of higher wages. The thresholds for high-cost plans are $10,200 for individual coverage and $27,500 for family coverage, and many union health plans in the entertainment industry exceed those thresholds.

Obamacare has been a lifeline to many industry workers who don’t earn enough to be covered by their unions’ health plans, but the guild says that the Cadillac Tax will undo that good by harming those who are covered.

“President Obama’s signature law has succeeded in bringing health care to millions of uninsured Americans,” the guild said. “In order to avoid a deeply regressive result that is contrary to the stated purpose of the Affordable Care Act, collectively bargained health plans must be exempt from this huge excise tax. This is the only way to ensure that working people who made the rational decision to bargain for a reasonable level of benefits from their employers do not lose their benefits.”

In February, the IRS issued a notice covering issues concerning the Cadillac Tax and requested comments on the possible approaches that could ultimately be incorporated into new regulations.

This article was printed from https://deadline.com/2015/08/obamacare-wga-east-wants-union-exemption-to-cadillac-tax-1201508463/