WE WON!!

Improvements Negotiated to the Excise Tax

                                                                                                                                                                            Jan.15, 2010

CWA leadership, locals and our members have led the opposition to the excise tax. From the start, CWA leaders made it clear that a tax on workers’ health care was the wrong way to

finance health care reform. We fought against this plan in the Senate and supported our friends in the House of Representatives who outlined better ways to finance health care reform. We supported Connecticut House Representative Joe Courtney in obtaining 190 signatures on a letter opposing the excise tax.

Because of this work, organized labor has been “at the table” and President Cohen and other labor union leaders have spent many hours talking with President Obama and White House officials to work out ways to ease the negative impact of this tax on our members. At the same time these discussions were taking place, you were keeping the pressure on: first the House, then the Senate, and then back to the House.

All of this work set the stage for several days of continuous tri-party bargaining and through these negotiations we made significant strides in not only protecting our members, but in protecting all middle-class families who have health insurance coverage.CWA members will be protected through 2017. That gives us at least one – and in some cases more than one – round of bargaining to address the impact on our members’ plans from the changes.

This is not the plan we would have written if we were the sole author, but just like contract negotiations here is another side at the table. And, in this case there are three other sides: the House, the Senate and the White House. We are proud that the improvements we negotiated protect both union members and members of the public. Labor unions have a long history of protecting all workers and this isanother great example.

Following is the list of improvements we made.

Summary of Improvements Negotiated to the Excise Tax

1) Delays Effect of Tax Until 2018: Provides a five-year transition window for all plans negotiated through collective bargaining and for state and local employee plans before they are potentially subject to the tax. This is what is typically done under federal laws to allow parties to collective bargaining agreements time to renegotiate the plans.

2) Raises Thresholds for Active Workers: Raises the threshold at which family plans are taxed from $23,000 to $24,000 in 2013 for all working families and from $8,500 to $8,900 for singles. Annual increases are tied to the Consumer Price Index plus one percentage point.

3) Increases Thresholds for Excessive Inflation: Raises the thresholds higher if health care costs grow faster than expected from 2010-2013.

4) Exempts Dental and Vision Plans from Threshold Calculations: This will begin in 2015,which could raise the thresholds as much as $1,500 for families.

5) Adds Demographic Factors to Determine Plan Thresholds: Thresholds for plans that have larger average of older workers and female workers will be modified to reflect the higher plan costs for those workers.