It has nothing to do with union fees. The multi-employer plan transition relief (2E) provides that a contributing employer is treated as offering coverage, and generally protected from a penalty, if the following three criteria are met:
The employer is required to contribute to a multi-employer plan on behalf of an employee pursuant to a collective bargaining agreement
Coverage is offered under the multi-employer plan to employees who meet the plan’s eligibility rules
The coverage offered by the plan is affordable and provides minimum value
The key here is IF the collective bargaining agreement stipulated that the employer contribute for health coverage. If a union contract stipulates the employer contribute to a health plan, then the theory is that the employer did not have 100% control of the ACA guidelines. If the contract does not stipulate any health coverage then the employees would be handled as any other employee.
If the plan is self-insured, they must report each individual covered under Part III of the 1095-C.