US: the UAW and automakers could debate over health care tax image

President Barack Obama’s Affordable Care Act is being supported by organized labor in general, but a certain feature of it could actually prove contentious and turn into a key point in the negotiations between the UAW and the Detroit Three.

Starting with 2018, all individual health insurance plans worth more than $10,200 per year, or any family plan costing more than $27,500, will be taxed by a 40 percent levy on the sums above those levels. And this would impact the current UAW plan, which offers no deductibles for the veterans that started work before 2007 and have generous benefits. The upcoming UAW contract could actually be signed beyond 2018, which means the tax would be a point in the negotiations ongoing this summer as the UAW and the automakers seek a way to mitigate the extra costs stemming from the levy. While UAW members will not be paying it, the general assumption is that insurers will make sure to pass the cost through increased premiums. “I don’t think it’s very fair of the U.S. government to penalize people for having a good health care plan,” commented back in June UAW President Dennis Williams.

This point is one agreed by both the UAW and General Motors, Ford and FCA, which also believe it’s unfair to hit with new taxes the companies that offer better-than-average health care insurance. According to the Congressional Budget Office forecast, the new tax would bring around $87 billion between 2018 and 2025, used to cover the plans offered to people that were previously uninsured.