Keller Thoma Client Prevails in Arbitration Case Involving Health Care Changes Required by the Affordable Care Act

Conflicts between bargaining agreements and the Patient Protection and Affordable Care Act (ACA) are becoming increasingly common – especially where the agreement lists specific plans or benefits. A Keller Thoma client recently prevailed in a labor arbitration addressing this issue. The client had a collective bargaining which identified specific health care benefits. However, the insurer determined that the policy could no longer be issued under the ACA. The client attempted to negotiate a replacement policy. The union, however, refused to accept any changes, and claimed that the client was required to provide the coverage set forth in the contract, despite the ACA.

In a case handled by Rick Fanning and Catherine Reed from Keller Thoma, the Arbitrator ruled that the ACA rendered the old plan illegal, and that it was impossible to provide the plan described in the collective bargaining agreement. The Arbitrator noted that the parties’ agreement had a clause which called for bargaining in the event that a contractual provision was rendered illegal. The Arbitrator found that the client had made extensive efforts to bargain with the union, had offered alternative plans and had promptly responded to numerous information requests from the union. In light of this, the Arbitrator denied the grievance and found that the client was justified in making changes to the health plan.

This case offers guidance (and hope) for those caught between the requirements of the ACA and a collective bargaining agreement. Please contract any Keller Thoma attorney if you wish to discuss this issue.