A proposed rule change by the Center for Medicare and Medicaid Services could end the practice of automatically deducting union dues from personal care attendants in Connecticut who are paid with Medicaid funds.

The potential regulatory change will affect more than 8,500 PCA’s in Connecticut who would no longer have their union dues to New England Health Care Employees Union District 1199 deducted automatically from their paychecks. PCAs would have to pay the union directly

At issue is federal law which states Medicaid funds intended to help the poor and disabled cannot be paid to anyone other than a Medicaid provider, unless ordered by a court.

A regulation change passed in 2014 allowed states to pay to third parties on behalf of Medicaid providers “for benefits such as health insurance, skills training, and other benefits customary for employees.”

Critics argue unions have used the third party provision of the law to deduct union dues from PCA’s and other in-home providers who are paid by the state but employed directly by elderly or disabled individuals -- known as self-directed care.

The Center estimates that unions take in $71 million per year through Medicaid funds across 13 states, including Connecticut.

The practice has been dubbed the “Medicaid dues skim” with critics alleging states are funneling money meant to help the needy into union coffers.

Maxford Nelson, director of labor policy for the Washington Freedom Foundation said, “It is very heartening to see this administration taking the first practical steps to stop states and unions from deducting money from the Medicaid checks of home caregivers serving our society’s disabled and elderly. This illegal and exploitive practice has victimized hundreds of thousands of caregivers.”

The “dues skim” is part of a class-action lawsuit filed by the Freedom Foundation in Washington, which alleges in-home care providers funded through Medicaid were not allowed to opt out of SEIU 775, and were forced to pay union dues.

According to the Center for Medicare and Medicaid Services, federal regulations do not authorize states to create new exceptions to the third-party provision. “We are concerned that § 447.10(g)(4) is overbroad, and insufficiently linked to the exceptions expressly permitted by the statute.”

In Connecticut, Gov. Malloy created the PCA Workforce Council and attempted to unionize PCAs funded with Medicaid dollars through executive order.

A subsequent Supreme Court case Harris v. Quinn ended the forced unionization of PCA’s, but they can join the union voluntarily. All PCAs in the state must attend a state mandated orientation which includes a union pitch session.

Unionized PCA’s pay anywhere from 2.25 percent of wages up to $79 per month in union dues, according to David Pickus, president of 1199 in an article printed in CT Mirror.

If passed, the rule change could affect union dues collection, potentially leading to a loss of funds as NEHCW would have to rely on payment from its members, rather than dues payments deducted by the state.

The NEHCW negotiated a pay increase for unionized PCAs paid through state Medicaid funds to $16.25 per hour in March of 2018. The General Assembly approved the contract.

Private home care providers argue the Medicaid increases for only unionized caregivers puts them at a competitive disadvantage. Private providers note they haven’t received a Medicaid waiver increase in ten years, even though the state’s minimum wage has increased.

The Center for Medicare and Medicaid Services today published its Notice of Proposed Rulemaking on the Federal Register website and began a 30 day comment period during which interested parties can submit comment on the proposed rule change.

Following the comment period the U.S. Department of Health and Human Services will evaluate the comments, make possible amendments and publish the new regulation.

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