Several employers have approached me with questions about the health care reform changes and the potential impact it will have on collective bargaining agreements that extend beyond January 1, 2014.  While not purely a "plan administration" issue, there should be some reason for employers to pause and wonder how they should address health care reform in upcoming negotiations.

Since there is no real guidance or regulations that have come out yet, we are all waiting for explanations, but employers about to sign bargaining agreements that obligate them to contribute to a multiemployer health fund may not be able to wait.  For example, what will happen if employees decide to opt out of the fund and get into an exchange?  Who will be responsible for payment of penalties?  What is the fund does not meet the definition of a "qualified health plan" (which will eventually be defined)?  What impact will grandfathering have on coverage obligations and contribution obligations, if any?  What if the new rules will render the fund unsustainable and it ceases to exist mid-contract?

There are not really answers to these questions yet.  There are just too many variables that are not yet defined.  But one of our labor attorneys here suggested to me that maybe the best option is to consider including a "mid-term reopener" in the collective bargaining agreement that allows the employer, at its option, to reopen the agreement and bargain to address these issues once regulations are finally issued.  In other words, a provision that unlocks the agreement before its conclusion so that both employer and union can deal with what might be serious concerns regarding health benefits coverage.

So to the extent you as an employer may be looking at negotiating a new agreement that will carry past January 1, 2014, you should consider raising this issue at bargaining.  Since we know changes are coming, it seems logical that both parties would be best served by addressing it now rather than hoping nothing bad happens later.  Your Fox Rothschild attorney would be happy to assist.