1st District Court of Appeal Hears Arguments in Health Insurance Law Referendum Case
As expected, the 1st District Court of Appeal in San Francisco on Thursday heard oral arguments in a case concerning the placement of a proposed referendum to repeal an employer-sponsored health insurance law (SB 2) on a state ballot this year, the San Jose Mercury News reports (Feder Ostrov, San Jose Mercury News, 1/16). SB 2, scheduled to take effect Jan. 1, 2006, will require employers with 200 or more employees to provide health insurance to workers and their dependents by 2006 or pay into a state fund that would provide such coverage. Employers with 50 to 199 employees will have to provide health insurance only to workers by 2007, and employers with fewer than 20 workers will be exempt from the law. Those with 20 to 49 employees will be exempt from the law unless the state provides tax credits to subsidize the cost of health benefits. Former Gov. Gray Davis (D) signed the law in October. Sacramento County Superior Court Judge Lloyd Connelly last month ruled that petitions to place the referendum to repeal SB 2 on the March ballot were invalid because they misled voters. Californians Against Government Run Healthcare, a coalition of business groups led by the California Chamber of Commerce, appealed the decision to the 3rd District Court of Appeal, but that court's 10 justices recused themselves from the case because retired Justice Daniel Kolkey, one of their former colleagues who resigned in November, signed a legal brief filed in the case. The 1st District Court agreed to hear the case last month (California Healthline, 1/15). The referendum's supporters originally intended to place the initiative on the March ballot, but its inclusion on the November ballot is more likely, the Mercury News reports (San Jose Mercury News, 1/16). Randy Riddle, an attorney for Secretary of State Kevin Shelley (D), said that it is "too late" to include the referendum on the March statewide ballot because some ballots for the March election that do not include the measure have already been printed and sent to voters living overseas, the San Francisco Chronicle reports. Remaining absentee ballots will be mailed in two weeks.
Arguments at the hearing focused on whether Attorney General Bill Lockyer's (D) 100-word summary of SB 2, which was included on petitions calling for the referendum, was accurate (Egelkno, San Francisco Chronicle, 1/16). The petition said the law would establish a "mandatory" health insurance program for businesses with 20 or more workers, according to the Mercury News. However, under the law, businesses with 20 to 49 workers are exempt unless lawmakers approve tax credits. Deputy Attorney General Hiren Patel told the panel of three judges that a law setting a word limit for the description on the petitions precluded the exemption from being included in the summary (San Jose Mercury News, 1/16).
Kolkey, who is working with the Chamber of Commerce and other business organizations supporting the referendum, said that Lockyer's summary "accurately described the major points of the law in the space available," adding that voters could examine the full text of SB 2 before signing the petitions, the Chronicle reports. However, Robin Johansen, an attorney for SB 2 sponsors Senate President Pro Tempore John Burton (D-San Francisco) and Sen. Jackie Speier (D-San Mateo), said that the petition left signers "with a distorted picture of the law," according to the Chronicle (San Francisco Chronicle, 1/16). Kolkey said that ballot materials that would be mailed to voters could clarify any confusion over the meaning of the law (Rapaport, Sacramento Bee, 1/16).
Additional information on SB 2 is available online.