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NLRB Rules That Employers Have a Duty to Bargain Over ACA-Mandated Group Health Benefit Changes

June 19, 2017

Overview

On May 16, 2017, the National Labor Relations Board (“NLRB”) issued a decision holding an employer has the duty to bargain with a union over changes to a group health plan even though the changes were mandated by the Affordable Care Act (“ACA”) and beneficial to covered employees.  Western Cab Company, 365 NLRB No. 78 (2017).  A ‎copy of the decision can be accessed through the NLRB portal.

Prior to the ACA, Western Cab Company’s group health plan imposed a one-year waiting period for the ‎bargaining unit employees at issue. In order to comply with the ACA, the company unilaterally made ‎health insurance coverage available to the union employees after 60 days of employment.  The union filed an unfair labor practice ‎charge regarding this action.  In defense, the company argued that its unilateral change was privileged ‎because the ACA mandated the change.‎

In rendering its decision, the NLRB opined that when an employer is compelled to make changes in ‎terms and conditions of employment in order to comply with statutory mandates, it must ‎provide the collective bargaining representative with notice and an opportunity to bargain over the ‎discretionary aspects of such changes. ‎

The ACA generally prohibits employer-sponsored group health plans from imposing a coverage ‎waiting period of more than 90 days.  However, while the ACA establishes a maximum waiting period ‎of 90 days, it does not prohibit employers from implementing a shorter waiting period.  Accordingly, ‎the company was not compelled by the ACA to adopt a 60-day waiting period; its plan could have been revised to prescribe a shorter waiting period, or no waiting period at all. ‎ The NLRB thereupon ruled that because the ACA gave employers some discretion as to how to achieve minimum ‎compliance with the waiting period mandate, the company had a duty to offer the union the ‎opportunity to bargain over the matter.  An order was then issued requiring the company to bargain ‎with the union on the issues upon request, and to make whole any bargaining unit employee who had ‎been negatively affected by the refusal to bargain, with interest.‎

Interestingly, the unilateral change to the group health plan was held to be a violation even though it was beneficial to the ‎affected bargaining unit employees.‎

An employer will need to take heed of this NLRB decision if it previously made unilateral, ACA-prompted changes ‎to its group health plan for bargaining unit employees.‎ In addition, if future changes are made under the ACA, either through pending legislation or ‎administrative rulings, an employer will need to offer to bargain with its unions prior to implementing ‎changes for which any discretion is involved, even if the change does not adversely affect covered employees.‎

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