California Chamber of Commerce Files Referendum Petition To Repeal Employer-Sponsored Health Benefits Law
As expected, the California Chamber of Commerce this week submitted a petition to the state to place on the ballot a referendum to eliminate a recently-enacted health benefits law (SB 2), the San Francisco Chronicle reports (Abate/Wildermuth, San Francisco Chronicle, 10/10). The law will require some employers to either pay at least 80% of premiums in employee health insurance plans or pay into a state fund that would require such coverage. Employers with 200 or more employees would be required to provide health coverage to workers and their dependents by 2006 to avoid paying into the fund, businesses with 50 to 199 workers will have to offer health insurance to employees only 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 offset the cost of health benefits. Employers who already offer health benefits that comply with the new law can continue offering those plans provided that the plans meet the law's minimum requirements (California Healthline, 10/7). Fred Main, general counsel for the chamber, said the measure will "be bad for both employees and employers." The group must collect at least 373,816 signatures from registered voters to qualify for a referendum (Coleman, AP/San Francisco Chronicle, 10/9). The chamber also is expected to challenge the measure in court (San Francisco Chronicle, 10/10). Opponents have maintained that the law constitutes a new tax on businesses, which would require a two-thirds legislative majority to pass, rather than the simple majority that passed SB 2. In addition, a federal lawsuit could be filed alleging that the new law violates federal statutes about regulation of health benefits. The chamber has said that the law might violate the 1974 Employment Retirement Income Security Act. That law gives states authority to regulate the insurance industry but stipulates federal regulation of employee benefits (California Healthline, 10/7).
Governor-elect Arnold Schwarzenegger (R) in a press conference on Thursday stated his opposition to SB 2. "I'm opposed to it, absolutely. We have to create a business-friendly atmosphere here. ... Right now, small business cannot afford [the health insurance requirement]," Schwarzenegger said (Lakely, Washington Times, 10/10). Schwarzenegger declined to state whether he would work to eliminate the law, saying, "I will share that information as soon as I make a decision on that" (San Francisco Chronicle, 10/10). KCET's "Life & Times" on Friday will report on the impact of SB 2 ("Life & Times," KCET, 10/10). The full transcript and audio of the segment in RealPlayer will be available online a few days after the broadcast.
Additional information on SB 2 is available online.