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More Unions and Companies Win Health-Reform Exemptions

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The list of companies, insurers and unions winning exemptions from the new health-reform legislation has grown to 222, doubling since early November and up from just 30 in the month of October.

Companies and unions that provide health coverage for more than 1.5 million people now don’t have to abide by health-reform changes for one year beginning January 1. That includes 34 unions with more than 140,000 members.

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Many unions had fought hard for health reform and were dismissive about fears that companies would simply dump their coverage if health reform passed. But they are now demanding to be exempt from the new law.

Many of the nation’s biggest unions had also backed President Barack Obama's campaign. Early in the health-reform debate, unions won exemptions to the tax on "Cadillac" health-care plans.

The question for workers affected by these exemptions is this: Will their low-cost health-insurance plans continue to provide the coverage they need?

The question for companies who do not get waivers is this: Is it fair that they must follow the health-reform rules and regulations that every other company in the United States must follow, while their competitors who got waivers do not?

The question for taxpayers is this: Since it appears relatively easy for companies to get waivers from health reform, will it be just as easy for taxpayers to get waivers on the individual mandate, which says everyone must buy health coverage or pay an annual fine, anywhere from $750 per person to not more than $2,250 per household? (The Congressional Budget Office estimates the government will raise $69 billion over ten years from this fine -- $17 billion from individuals, $52 billion from companies).

The question for voters is this: Health reform did not spell out who should get these waivers -- government officials are making these decisions. Is this how the nation’s health system should be administered?

Insurers Aegis, Aetna (NYSE:AET) and Cigna (NYSE:CI), as well as the DISH Network (NASDAQ:DISH) and Convergys, an info tech software solutions company won exemptions from health reform.

So did Sensient Technologies, a maker of food colors, flavors, and fragrances. So did Universal Orlando, an amusement park and resorts operator.

And so did Meijer supermarkets, O'Reilly Auto Parts, the human resources company Adecco Group, and senior citizen caregivers HCR Manor Care, Carington Health, Telesis Management and Adventist Care Centers.

AMF Bowling Worldwide won an exemption. So did Aegis, one of the largest HIV/AIDS databases in the world, and so did HealthPort, a health information technology company. FleetPride, a trucking company, got an exemption too. And so did the hair salon chain Regis Corp.

And the list of fast food restaurants that won exemptions along with McDonald’s (NYSE:MCD) and Jack in the Box has grown, too. Cracker Barrel, Waffle House, Ruby Tuesday, Denny's, Darden Restaurants, and Carlson Restaurants, which owns T.G.I. Friday's, also won exemptions.

The federal government began granting waivers from a part of the health-reform law when it gave the fast-food chain McDonald’s an exemption for its mini-med plans last September.

Mini-med plans cover part-time and low-wage workers. McDonald’s threatened to drop its mini-med plans, covering 30,000 workers, if it did not receive an exemption.

Health reform phases out by 2014 that annual limits that cap the dollar amount some plans annually pay for health care, as in the case of mini-med plans, which often provide coverage for as little as just $2,000 a year. These plans "are the only option for many Americans who can't afford coverage on the individual market," a White House blog notes.

Furthermore, the blog adds that "estimates from employers and insurers indicated that complying with the new [reform] rules could cause mini-med premiums to rise by more than 200%, force employers to drop coverage, and send many Americans to purchase insurance on the individual insurance market, where they would get an even worse deal than what they have today."

(The White House notes that the reform bill's phase-out of dollar limits on health plans led to the waivers on mini-med plans to ease transition. It says medical loss ratios in the reform bill requiring health insurers to spend 80% to 85% of premiums on medical benefits and not administrative costs were not a factor behind the waivers, as had been reported. Those loss ratios are also a threat to mini-med plans, health analysts note).

Indeed, McDonald's and other companies had argued that this new requirement in the law was too onerous. HHS feared the companies might simply go ahead and drop health coverage altogether, or simply jack up premiums or cut benefits.

So, HHS opted to provide waivers as companies with mini-meds transition away from them by 2014, when the new law takes effect. Companies must apply annually to renew their waivers up until that time. This way, workers can still get their mini-med coverage in the interim, however meager they are, the government says.

Waivers depend on "a series of factors including whether or not a premium increase is large or if a significant number of enrollees would lose access to their current plan because the coverage would not be offered in the absence of a waiver,” says HHS.

But McDonald’s exemption opened the floodgates at the Department of Health and Human Services [HHS], which oversees the exemptions.

HHS started granting hundreds of these waivers so that workers with these low-cost plans wouldn't lose their insurance. The department also submarined the list of which companies and groups got the exemptions on its website, without issuing a press release.

So now dozens of companies and organizations won't be forced, for now, to increase the minimum annual benefit payouts in their low-cost health plans. It’s arguable whether some of these companies could have afforded doing so without the exemptions, as many of these companies are profitable.

Here is a list of unions with more than 140,000 members now exempt from a provision in the health-reform law:

1.     Bricklayers Local 1 of MD, VA and DC: 1,985 members

2.     International Brotherhood of Trade Unions Health and Welfare Fund - Local 713: 861 members

3.     Indiana Teamsters Health Benefits Fund, Local 1102: 500 workers

4.     Amalgamated Welfare Fund: 1,384 members

5.     Local 1102 Health & Benefit Fund: 4,642 members

6.     Local 1102 Welfare Fund-- Lerner Employees: 245 members

7.     Local 338 Affiliated Benefit Funds: 18,209 members

8.     Operating Engineers Local 835 Health and Welfare Fund: 576 members

9.     Texas Carpenters and Millwrights Health and Welfare Fund: 4,729 members

10.  United Food and Commercial Workers Local 1445 New Hampshire: 148 members

11.  Plumbers and Pipefitters Local No. 630 Welfare Fund: 1,166 members

12.  United Food and Commercial Workers Union Local 1000: 3,855 members

13.  1199 SEIU Greater New York Benefit Fund: 4,544 members

14.  Laundry and Dry Cleaning Workers Local No. 52: 1,547 members

15.  Social Service Employees Union Local 371: 34,000 members

16.  United Food and Commercial Workers Union (Mount Laurel, NJ): 4,100 members

17.  United Food and Commercial Workers Union Local 1459: 1,400 members

18.  United Food and Commercial Workers and Participating Employers Interstate Health and Welfare Fund: 9,780 members

19.  Laborers' International Union of North America Local Union No. 616 Health and Welfare Plan: 188 members

20.  Service Employees Benefit Fund: 1,297 members

21.  UFCW Allied Trade Health & Welfare Trust: 68 members

22.  United Food and Commercial Workers Union Local 1995: 2,779 members

23.  Asbestos Workers Local 53 Welfare Fund: 2 members

24.  Plumbers & Pipefitters Local 123 Welfare Fund: 534 members

25.  UFCW Local 227: 1,125 members

26.  UFCW Maximus Local 455: 59 members

27.  Local 25 SEIU: 31,000 members

28.  UFCW Local 1262: 5,390 members

29.  Local 802 Musicians Health Fund: 1,801 members

30.  Transport Workers: 107 members

31.  Service Employees International Union Local 1 Cleveland Welfare Fund: 520 members

32.  Teamsters Local 522 Welfare Fund Roofers Division: 270 members

33.  Cleveland Bakers Teamsters: 1,000 members

34.  DC Cement Masons Welfare Fund: 225 members

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