02 Oct What “Repeal and Replace” Could Mean for Small Employers – Part 4
The Collective Bargaining or Union Model
The Affordable Care Act (ACA) was intended to keep insurance obtained through employment intact, while adding coverage for the uninsured through new state insurance exchanges and an expansion of Medicaid. Among the programs to be protected were the multiemployer Taft-Hartley plans that were collectively bargained between unions and employers.
Unlike the typical single-employer-sponsored health care plan, multiemployer plans are maintained under one or more collective bargaining agreements; participating employers make contributions to purchase healthcare from the multiemployer plan. These collective bargaining agreements specify that employer and employee contributions are to be paid to the Taft-Hartley, multiemployer trust for the purchase of health care and various other benefits.
Multiemployer plans provide benefit security and portability of benefits for employees who move from employer to employer within the industry covered by the plan. Multiemployer plans enable eligibility to be continued from one participating employer to another participating employer, or job-to-job, without interruptions in coverage.
Multiemployer plans also provide a purchasing tool for employers to access coverage on a more economical basis due to a pooling of risk and economies of scale. As a result of participating in a large pool, employers are typically able to offer a broader selection of coverage options for all employees.
Individual employers who participate in a multiemployer plans can select from a variety of available employee benefits to provide for their employees, tailoring the plan to fit their needs, including:
- Health care benefits
- Pension benefits
- Life insurance
- Unemployment benefits
- Accident insurance
- Occupational illness/injury benefits
- Training and education (including apprenticeships and educational scholarships)
- Pooled vacation, holiday and severance benefits
- Financial assistance for housing
- Child care centers
- Disability/sickness insurance
- Legal services
Multiemployer plans are commonly found in industries and geographic areas where employers are covered by collective bargaining agreements with one or more participating local unions. Covered members could work for several participating employers during their career. Examples of these industries include construction, arts and entertainment, public entities, food , transportation, sanitation, service (including lodging and health care workers), mining and communication.
PacFed administers many collectively bargained multiemployer plans in a variety of industries. To find out if a multiemployer plan is right for your company, consult a licensed and reputable third-party administrator with experience in the administration of multiemployer plans.