As the U.S. House and Senate continue to work to merge their comprehensive health reform bills into one piece of legislation for the president’s signature, one large obstacle appears to have been knocked down.

On Jan. 14, the AFL-CIO announced that “following two days of intense negotiations at the White House,” union leaders “believe they are on the verge of winning significant improvements for working families in the pending health care reform legislation.”

At issue were taxes on high cost, or “Cadillac,” health care plans that will help to pay for billions of dollars in reform measures proposed in Washington, D.C.

Richard Trumka

In a conference call, AFL-CIO President Richard Trumka said the unions and Democratic leadership have reached a deal that, in part, raises thresholds for taxation under the Senate’s reform bill. That legislation proposed a 40% tax on employer-sponsored health plans exceeding $8,500 for individuals and $23,000 for families, beginning in 2013.

Trumka said that under a deal with the White House, that threshold will be raised to $8,900 for individuals and $24,000 for families, with further increases on the threshold if health care costs grow faster than expected from this year through 2013.

Other details of the agreement with the White House include exempting dental and vision costs from plan values beginning in 2015 and raising the threshold for plans that have a significant number of women and/or older workers.

‘Milestone’ legislation

A five-year transition window would be provided for state and local employee plans and plans negotiated through collective bargaining agreements before they are subject to the tax, according to the AFL-CIO. This delayed start typically occurs when federal laws affecting workers are enacted so agreements will not have to be renegotiated.

Trumka said the final health care bill he expects to emerge from ongoing negotiations on Capital Hill is “a milestone.

“We’ve been fighting for health care for over 60 years, and we are on the threshold of a significant achievement….But we don’t look at this as the end of the fight, but another step in the quest for real reform,” he said.

White House Press Secretary Robert Gibbs declined to elaborate on the negotiations in his press briefing Jan. 14, except to say that President Barack Obama, “has obviously a strong desire to see a bending in the cost curve for health care, while at the same time not impacting working men and women.

“So those meetings have taken place in order to try to find some sort of compromise that does not impact working men and women, while at the same time we take responsible actions to ensure that the amount of money that people are paying for health care, that we change the direction of that curve,” Gibbs said.