Taft Hartley Funds Basics

Five Characteristics of Taft-Hartley Multi-Employer Health and Welfare Plans

Private sector unionized employees can get health and other benefits through a Taft-Hartley Multi-Employer Health and Welfare Plan.  These plans have five basic characteristics:

• One or more employers contribute to the fund.
• The fund is collectively bargained with each participating employer.
• The fund and its assets are managed by a joint board of trustees equally representative of management and labor.
• Assets are placed in a trust fund, legally distinct from the union and the employers, for the sole, and exclusive benefit of the employees and their families.
• Mobile employees can change employers without losing coverage provided the new job is with an employer who participates in the same Taft-Hartley fund.

Collective Bargaining Agreements    

A fund is maintained pursuant to one or more collective bargaining agreements between a union(s) and employers. More than one employer is obligated to contribute to the fund. Funds may vary in size from very few employer contributors to many hundreds of employer contributors. The employers agree in the collective bargaining agreement with the union to contribute to the trust fund at certain rates that are typically based upon hours worked by the covered employees.

Portable Benefits

Funds provide portable benefits for workers who typically do not stay very long with the same employer:

• Construction workers
• Seasonal workers

Industries that Participate

Manufacturing industries that commonly participate in Taft Hartley plans are:

• Food and confectionary
• Apparel and needle trades
• Printing and publishing
• Lumber and wood
• Furniture
• Metal work

Non-manufacturing industries that commonly participate in Taft Hartley plans are:

• Mining
• Building and construction trades (about 1,500 funds)
• Motor transportation
• Wholesale and retail trades
• Services
• Entertainment
• Communication
• Public utilities

Comprehensive Health Coverage

Taft-Hartley funds, also referred to as multiemployer plans, are often the only way small employers can provide comprehensive health coverage to their employees in a cost effective manner. Taft Hartley funds create economies of scale cost-savings because of their central administration and the pooling of resources.

The detail for how payments are to be made is in a written agreement with the employer. There is an annual audit of the trust, which is available to interested persons.

Fund Members

A fund can be established for union or non-union employees, including or not including retirees.  It is most often established for union members and union retirees and is usually structured as a Taft-Hartley Health and Welfare Fund and is subject to the Employee Retirement Income Security Act (ERISA). 

Taft Hartley plans typically cover workers in a metropolitan area, but can be regional, statewide or nationwide in scope. The fund is the provider of the benefits; not the employer.

The Individuals covered through a fund are referred to as members or participants; not employees.

• There are about 2,500 multi-employer Taft Hartley funds
•  About 9 million participants
• About 700,000 contributing employers

Trustee Responsibilities

Taft Hartley trust funds and the assets of the funds are managed by a board of trustees. Management and labor are equally represented on the board. The trustees have several responsibilities including:

• Balancing the interests of the fund and its members.
• Fiduciary responsibilities for the assets of the fund.
• Determining and maintaining the key eligibility provisions for member participation in the fund.
• Benefit and plan design implementation and management.
• Consulting with professional advisors.
• Carrier selection.
• Financial management of the plan's income, expenses, and reserves.