Union leaders announce agreement on health care plan tax

By Lisa Mascaro

Thursday, Jan. 14, 2010 | 3:05 p.m.

WASHINGTON -- After health care bill negotiations with the White House, union officials announced today that an agreement had been reached to raise the threshold of the tax on Cadillac health care plans and exempt unions.

The deal also opens the new health care exchanges to any employer-sponsored plan – union or non-union – which is a substantial change from the House and Senate versions of the bill.

The union leaders pledged to support the health care bill if the agreement holds and said it will rejuvenate labor support for Democrats heading into the 2010 elections.

“We find ourselves on the threshold of a real milestone we’re about to achieve,” said Richard Trumka, president of the AFL-CIO. Trumka earlier this week was critical of Democrats heading into the elections.

There's still no official word from the White House and congressional leadership offices, but union officials said they believed all sides were on board.

The tax was intended to snare high-end health care plans, and experts believe doing away with such plans could help lower overall health care costs.

But the tax would also snare middle-income union households, where workers have often given up higher pay in favor of better benefits.

The agreement is important for union households in Nevada, some of which teetered on the threshold for the new tax.

Under the agreement, health care plans valued at more than $8,900 for single plans or $24,000 for family plans would be hit with the new 40 percent tax. The threshold had been raised from lower levels in the Senate bill.

Those with collectively bargained contracts, however, would be exempt from the tax until Jan. 1, 2018.

The changes mean the tax would bring in $90 billion, rather than $150 billion, to help fund the subsidies that would be provided under the legislation to help low- and moderate-income households buy insurance. Under both bills, all Americans would be required to carry policies.

The tax as proposed in the Senate bill had been a major sticking point as the House and Senate craft a final bill for the president.

Nevada’s House members, Democratic Rep. Shelley Berkley and Rep. Dina Titus, both opposed the tax in the Senate bill.

President Barack Obama and congressional leaders met all day Tuesday at the White House to craft a final deal on this and other issues that remain outstanding as they work to bring a bill before the chambers for final passage.

Obama is scheduled to meet with House Democrats this evening.