Guild considers sticking with composite rate for health care

The Guild is considering whether to stick with the composite rate where all employees pay the same amount for health care vs. changing to separate rates for singles, two people or families.

The Company is pushing for the change to avoid tax penalties under the Affordable Care Act (otherwise known as Obamacare.)

If we stick with the composite rate, the cost would go up from $49.02 a week for every employee to $55.67. If we switch to the Company proposal, the cost would phase in over three years. In the first year, the cost would be $45.22 for singles, $53.09 for two, and $60.67 for families.

The Company provided estimates for the subsequent two years, but those are based on health insurance rates not increasing. In the second year, singles would pay $34.80, doubles would pay $50.79 and families $66.16. In the third year — again, not counting any increases in annual cost — the price would be $24.69 for singles, $48.54 for couples and $71.49 for families.

For an employee with a family, that would mean a 46 percent increase in costs over three years or an added $1,168.44 a year without any other rise in insurance costs.
There are two reasons the Company is seeking this change: Under Obamacare, the premium must be no more than 9.5 percent of the salary of the lowest paid employee effective in 2015. Company officials said Wednesday there is one worker, a part-timer working 30 hours a week, who would fall under that category. Guild bargainers suggesting giving the one worker a raise would make more sense than shifting costs to all families.

In 2015, the one employee would have to seek health insurance through the federal exchange and a federal subsidy in order for the penalty to be triggered. The penalty would be $3,000 per person.

The company also worried it might have to pay a penalty in 2018 for having a “Cadillac plan.” The penalty is a 40 percent tax on the portion of most employer-sponsored plans that exceed $10,200 a year for singles and $27,500 for families.

Guild leaders noted there is no telling whether that provision would take effect in 2018, given changes in Congress and a new president being elected in 2016. Guild President Tim O’Brien added that the tax penalties are assessed on employers.

“Our members are not under any obligation to pay any portion of the Company’s tax penalties, if such penalties were ever assessed,” O’Brien said.

Under the imposed conditions under which Times Union employees have been living since 2009, O’Brien noted the Company cannot make further changes without negotiation. The union would not agree to pay any portion of taxes without a contract.
Publisher George Hearst attempted to argue the tax penalty would be part of the “total cost” for health care. O’Brien noted under the imposed language, the employees are obligated to pay 23 percent of the total cost of “health and dental insurance.” A tax penalty to the government does not pay for the insurance, so Guild members could not be ordered to pay any part of it, O’Brien said. In addition, the employer tax penalties were implemented after 2009 so they could not be retroactively considered as having been part of any prior agreement as to what “total cost” means.

The Guild will seek input from its members before deciding what we should approve. The mechanical unions in the plant have accepted the switch, but their members also have had raises more recently than ours. Let us known what you think by contacting a Guild officer, emailing the union office at office@albanyguild.org, or calling Tim O’Brien at 466-8700. We are also looking to find a meeting space at the library next week to gather members’ input.