How Can a Labor Union Provide Group Insurance?

The major purpose of labor unions is to gather the workers, so that an organization is able to talk over the collective bargaining agreement with its administration. This agreement involves such things as a safe working environment, appropriate wages, and that both the management and its employees are able to maintain any approved agreement. Vacations, insurance protection, work breaks, and retirement plans can also be entered into an agreement depending on the kind of business and its financial condition. Usually, labor unions become a platform for both sides to settle issues or grievances that might arise.

It is possible for a labor union to provide group benefits to its members because they are considered as a “natural group”, or one that is formed for whatever purpose other than getting insurance. A union may purchase a group policy for a big number if members who are employed by the same working organization, or even for union members working for different companies. Such is particularly advantageous in industries like construction, where members of the union may work for many employers during a working year. The labor union would also seek the services of a licensed representative, or a third party administrator in order to get the coverage it desires for its members. The availed insurance policy could be paid for entirely by the union, the employer (if all of its members work for one employer) or the union’s members, or a combination of the three.

Aside from the prohibition by the Taft-Hartley Act of employer payments to labor unions for the insurance premiums, state laws generally prevent plans wherein union members pay for the entire cost out of their own pockets. Due to this, the premiums come (completely or partially) from union funds, and partially from the contributions of its members. Labor union groups usually avail (for a relatively small amount) of group insurance, most of which is life insurance.

The Taft-Harley Act is also a term for the Labor-Management Relations Act, where the federal Law of the United States oversees the activities of labor unions. This act, which is effective to this date, was sponsored by Senator Robert Taft and Representative Fred Hartley Jr., and legislated by then overriding US President Harry S. Truman. Leaders of the labor unions called it as slave-labor bill. On the other hand, Truman reasoned that it was an intrusion on free speech that is deemed dangerous, and that it would conflict with significant ideals of the US democratic society.

This act is one of about 250 bills related to labor unions pending in both houses of Congress in the year 1947. In reaction to the rising radicalism of most unions and hostilities during the Cold War, the bill could be regarded as a response by businesses to post-World War II upsurge of labor in 1946.

To this date, different labor unions provide group insurance plan for its members; however, in spite of this opportunity, only a few group contracts are given to unions presently. Organized labor usually obtains insurance benefits for its members through collective bargaining with its employers. Due to this, union members are often covered under group insurance plans supported by one or more employers.