Union Health Plans—Not Just for Union Members

Many employers are surprised to learn that union-sponsored health plans can sometimes be available to employers that participate through a collective bargaining relationship or another eligible structure.

Union health plans have been providing healthcare coverage for generations.

How Are Union Health Plans Structured?

Most union health plans are sponsored by a Health & Welfare Fund established through collective bargaining agreements.

Instead of each employer purchasing separate insurance, participating employers contribute to one health plan that serves eligible members.

Many are governed by Boards of Trustees representing both labor and management.

What Laws Allow Union Health Plans?

Union health plans are generally established under:

• The Labor Management Relations Act (Taft-Hartley Act)
• ERISA (Employee Retirement Income Security Act)
• Internal Revenue Code provisions governing employee benefit plans

These laws allow multiple contributing employers to participate in a common employee benefit fund under specific legal requirements.

How Are Most Union Plans Funded?

Many union health plans are:

• Self-funded
• Protected by stop-loss insurance
• Professionally administered by Third-Party Administrators (TPAs)

Instead of purchasing traditional insurance, the Fund pays healthcare claims on behalf of participating members.

This structure often provides greater flexibility in plan design and provider contracting.

Why Do Employers Participate?

Union health plans often provide:

• Stable benefits
• Strong provider networks
• Multi-employer participation
• Experienced administration
• Long-established benefit programs

Many have successfully operated for decades.

Every Fund Is Different

Each Health & Welfare Fund establishes its own:

• Eligibility rules
• Employer participation requirements
• Contribution structure
• Benefit design
• Underwriting guidelines

There is no "standard" union health plan.