Obama Administration Grants 10 Waivers to UFCW, a Major Democratic Contributor

By Fred Lucas | January 21, 2011 | 6:58pm EST

Organized labor is pouring more than $300 million into election races this year in hopes of passing legislation that could potentially swell its ranks after years of declining union membership, a Chamber of Commerce official said Tuesday.

(CNSNews.com) – The Obama administration has granted one-year waivers to 10 separate local chapters of the United Food and Commercial Workers Union (UFCW), exempting it from a requirement under the new health care law that bans annual limits on what insurance plans will pay for medical coverage.

The UFCW political action committee contributed $673,309 in independent expenditures on the election of Barack Obama in 2008.

That committee, called the United Food & Commercial Workers International Union Active Ballot Club, also contributed $1.8 million to Democratic federal candidates in 2008 and $1.7 million to Democratic congressional candidates in 2010.

The health care law, the Patient Protection and Affordable Care Act, bans annual caps on medical coverage beginning in 2014. It prohibits an insurance plan from limiting how much it will spend on a policy holder’s medical coverage each year.

Under the law, the Department of Health and Human Services is phasing the coverage limits out, as yearly caps can be no less than $750,000 for 2011, no less than $1.25 million in 2012 and no less than $2 million in 2013.

In September, the HHS announced it would grant waivers to employers to prevent some workers from losing their benefits, if the insurer could not meet the health care law’s requirements on annual limits.

The waivers are granted by the HHS if the department determines “compliance in the interim final regulations would result in a significant decrease in access to benefits or a significant decrease in access to benefits or a significant increase in premiums,” according to a Sept. 3 memo by Steve L. Larson, director of the HHS Office of Consumer Information and Insurance Oversight.

The 10 UFCW waivers cover a total of 28,704 enrollees.

UFCW Communications Director Jim Papian said he believed the plans with waivers were negotiated health plans with the various employers of the membership. The annual limits on these plans would vary from each local chapter, he added.

“The waiver prospect is a way to make sure the regulations are working for workers, working for business, working for communities where these businesses serve, working for taxpayers,” Papian told CNSNews.com.

“If you look at all major legislation, whether it be even the Social Security legislation passed in the Roosevelt administration or Medicare that was passed in the Johnson administration, these acts go through an enormous process to tweak them in order to get to the most positive results that actually serve the people they are meant to serve,” he added.

The local organizations receiving the waivers include the United Food and Commercial Workers Local 1445 New Hampshire, covering 148 enrollees. The New Hampshire group is part of a larger, Local 1445 that covers more than 15,000 employees of grocery stores, cafeterias and food packaging and manufacturing companies in New England.

Another group getting a waiver is the UFCW Local 1000. Its health insurance plan covers 3,855 workers in Texas and Oklahoma. The waiver was granted on Jan. 1, 2011.

The HHS approved a waiver on Nov. 1, 2010 for the UFCW in Mount Laurel, N.J. affecting 4,100 enrollees. The Mount Laurel section is part of the larger Local 152 that covers food service employees in New Jersey, Delaware and Pennsylvania.

On Jan. 1, the HHS approved a waiver for United Food and Commercial Workers Union Local 1459, which has a health insurance plan covering 1,400 people in Massachusetts.

Effective May 1, the United Food and Commercial Workers and Participating Employers Interstate Health and Welfare Fund, covering 9,780 enrollees, will receive a waiver.

The UFCW Local 1995 got a waiver effective Nov. 1, 2010, covering its 2,779 enrollees in Tennessee, Kentucky and Alabama.

On Dec. 1, 2010, HHS approved a waiver for UFCW Allied Trade Health & Welfare Trust, covering 68 enrollees.

The UFCW Local 227 got a waiver on Nov. 1, 2010, which covers 1,125 enrollees. The union itself represents 20,000 members in parts of Kentucky and Indiana.

The UFCW Local 455 waiver was approved on Jan. 1, covering 59 enrollees in parts of Texas and Louisiana.

A total of 5,390 enrollees are affected by the waiver for UFCW Local 1262, approved on Oct. 1, 2010. The local calls itself New Jersey’s largest union.

The federal government issued waivers to 222 entities: companies, unions and charitable organizations. Among these groups, 45 are labor union organizations. A total of 1,507,418 enrollees are affected by the waivers. More than one-third -- 512,315 – of the enrollees affected are insured under the union plans.

CNSNews.com previously reported that the United Federation of Teachers, representing New York City public school teachers, received the largest waiver, affecting 351,000 enrollees.

Karl Rove, White House advisor to former President George W. Bush, said in a commentary for The Wall Street Journal that the labor unions have disproportionately benefited from Obama administration waivers.

“It’s not hard to connect the dots,” Rove wrote on Jan. 6. “The Obama administration is using waivers to reward friends. On the flip side, business executives will be discouraged from contributing to the president’s opponents or from taking any other steps that might upset the White House or its political appointees at HHS.”

Papian disagreed with that assertion.

“I don’t think that’s the case,” Papian told CNSNews.com. “Businesses have applied. Unions have applied. I think it’s meant to serve the American people, business and workers.”

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