After ObamaCare, no one’s privately funded health plan is safe.

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With Democrats trying to pivot to income inequality before the 2014 midterms, a new labor union report says ObamaCare threatens to do tremendous harm to low-wage workers. 

“Ironically, the [Obama] Administration’s own signature healthcare victory poses one of the most immediate challenges to redressing inequality,” warns UNITE HERE, one of the largest culinary unions. That’s because ObamaCare’s redistribution scheme takes from the bottom middle class to enrich the poor.

Pointing to a Brookings Institution study, UNITE HERE highlights a sobering fact. In order for people in the lowest two tenths of income to receive gains of 5.3-7.2 percent from ObamaCare, the third and fourth lowest brackets will lose between 0.9-1.1 percent of their income. The bracket least affected by the controversial health law is the top tenth, losing a relatively small 0.3 percent.

“Only in Washington could asking the bottom of the middle class to finance health care for the poorest families be seen as reducing inequality,” the union concludes sarcastically.

It gets worse for UNITE HERE’s membership. In a simple two-page chart the union explains how ObamaCare’s mix of incentives and penalties will kill its current health insurance plans by 2017.

Starting in 2013, 388 employers began cutting back hours to avoid meeting the law’s threshold for full-time employees. In 2014, all insurers must pay a new tax of $63 per enrollee. But while some companies can recoup part of that tax via ObamaCare subsidies, those that do not participate on an ObamaCare exchange cannot. In 2015, the employer mandate goes into effect, forcing a choice between paying $8,000-$12,000 per employee for ObamaCare-compliant coverage, or dropping coverage and paying a fine of $2,000 per employee. Finally, between 2016 and 2017 the so-called “Cadillac tax” springs to life. It will impose a tax equivalent to 40 percent of the value of some plans with lavish benefits.

Taken together, the whole system looks like a way to force people off of their current insurance plan in favor of an ObamaCare-approved alternative.

UNITE HERE, one of the earliest supporters of President Barack Obama, wants an exemption.

The problem with ObamaCare as UNITE HERE sees it is the refusal of the Obama administration to qualify its health insurance plans for subsidies. Making subsidies available to union members is the only way for the union’s preferred plans to compete on price since ObamaCare undeniably raises the cost of coverage.

But UNITE HERE and the other unions agitating for similar treatment aren’t being completely candid about their dilemma.

UNITE HERE operates a non-profit Taft-Hartley insurance company funded mostly by the employers of its members. Taft-Hartley plans enable labor unions to deliver generous benefits at highly subsidized prices.

But all that is changing under ObamaCare. Even though all health insurance companies must comply with the health law’s premium-spiking regulations – such as covering dependents up to age 26 and accepting enrollees with preexisting conditions without penalty – only a portion of insurers get access to ObamaCare’s subsidies. That’s because subsidies are only available for plans sold on an ObamaCare exchange, because the company agrees to sell to any customer wanting to buy. UNITE HERE cannot comply with that mandate.

The reason is simple. Employers of UNITE HERE’s members fund Taft-Hartley plans as a way to reduce demands for higher wages. Since health benefits are tax-free if paid by an employer, many unions prove their worth to members by escalating benefits when wages stay flat. If UNITE HERE’s health company qualifies for subsidies, then that means anyone – including non-union members – must be allowed to purchase the union’s health plan. But that would put the employers of the union’s members on the hook for subsidizing a generous health package for non-union members. UNITE HERE’s leadership knows employers won’t go for that.
 
On the other hand, if Taft-Hartley plans continue to be barred from receiving ObamaCare subsidies, then the law’s combination of mandates and taxes will make union-run health insurance a more expensive proposition than plans offered on ObamaCare exchanges.

In either scenario, UNITE HERE and other Taft-Hartley unions are beginning to realize what conservatives have suspected all along:  After ObamaCare, no one’s privately funded health plan is safe. It’s a lesson both sides could be teaching voters during the 2014 midterm elections.