Bill Would Fine Large Businesses With Employees on Medi-Cal

Assembly member Jimmy Gomez (D-Los Angeles) has introduced a bill (AB 880) that would fine large employers if they do not pay their workers enough to keep them off of Medi-Cal, the Sacramento Bee reports. Medi-Cal is California's Medicaid program.

The Affordable Care Act already includes a provision that beginning next year would fine large employers if their full-time employees are forced to purchase a health plan through the state health insurance exchange -- called Covered California -- because they are ineligible for Medi-Cal or are not receiving employer-based coverage.

Details of Bill

Under Gomez's bill, the ACA threshold for fining businesses would be lowered so that large employers would be fined if their part- or full-time workers are enrolled in Medi-Cal.

The legislation -- which is supported by the California Labor Federation and United Food and Commercial Workers -- aims to encourage large businesses to offer job-based coverage.

While the amount of the fine has not been specified, the penalty could be about equal to the cost of providing job-based coverage.

Funds raised from the penalty would be used to increase Medi-Cal reimbursements for health care providers and subsidize state costs for the program.

Sara Flocks - a policy coordinator for the California Labor Federation -- said the businesses that could be affected include Wal-Mart and a variety of chain restaurants and janitorial companies.

Lawmakers' Comments on the Bill

Gomez said, "We need to close a loophole that basically allows the largest and most profitable employers in the state to skirt their responsibility to provide health coverage."

However, Assembly member Dan Logue (R-Linda) said the measure would "micromanage businesses." He said, "With this type of overregulation, a lot of these businesses basically are going to relocate or pass the cost on to customers" (Sanders, Sacramento Bee, 4/12).