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