Monday, November 01, 2010

CBA vs Grandpa

[ed: Caution, there be wonkery ahead]

ObamaCare©'s grandfathering issues are well-documented here at IB, but we've never discussed them as they pertain to Collective Bargaining Agreements (CBA's). According to the American Benefits Council, CBA's enjoy special status under ERISA. They're so special, in fact, that:

"[L]egislation has been carefully drafted to avoid the imposition of significant legal requirements on collectively-bargained plans in the middle of applicable bargaining cycles. Congress has recognized that employers and unions must be able to negotiate over the terms and conditions of employment (including employee benefits) ... with the security of knowing that the benefits of the bargain will not be changed, midcycle, by unforeseen legislative initiatives."


Turns out, ObamaCare© doesn't work and play well with these arrangements. According to information we've received from Medical Mutual of Ohio, other than switching to a new carrier (which would, ironically, cause an individual plan to become ungrandfathered), any changes made that would otherwise cause the plan to lose its grandfathered status prior to the termination of the last CBA, will render the plan nongrandfathered once the last provision of the CBA terminates.

Simply put, CBA plans, which were ostensibly protected from these kinds of legislative shenanigans, are subject to the same vagaries as the rest of us. Now, that's not necessarily a bad thing - after all, CBA's impact the cost of production and distribution of many goods and services - but it's another example of the (perhaps unintended) effects of ObamaCare©.

[Hat Tip: FoIB Beth D]
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