Joint Legislative Committee Approves Bill Requiring Employer-Sponsored Health Coverage
As expected, a joint Assembly-Senate committee late last night approved a bill (SB 2) that would require California employers to provide health insurance to employees or pay into a state fund that would provide such coverage, the Sacramento Bee reports (Rapaport/Chan, Sacramento Bee, 9/10).The measure, introduced by Senate President Pro Tem John Burton (D-San Francisco), now simultaneously moves to the Senate and Assembly floors, where a final vote is expected by Friday, when the Legislature adjourns, the Contra Costa Times reports. The latest version of the bill would require employers with 200 or more employees to provide health coverage to workers and their dependents by 2006 to avoid paying into the fund. Businesses that employ 20 to 199 workers would have to offer health insurance to employees only by 2007 (Adamy, Contra Costa Times, 9/10). Previous drafts of the bill had set both deadlines a year earlier (California Healthline, 9/9). New language in the bill states that employers with 20 to 49 workers would be exempt from the law unless the state provides tax credits to offset the cost of health benefits (Feder Ostrov, San Jose Mercury News, 9/10). Businesses with 20 or fewer employees would be exempt from the law (California Healthline, 9/9). Lawmakers also added language to the bill that would require employers to maintain the "same level of coverage" for current Medi-Cal or Healthy Families beneficiaries who would be covered under the bill, the Times reports (Contra Costa Times, 9/10). The bill would cap employee contributions to premiums at 20%. The bill would require health coverage options to include prescription drug coverage and meet state insurance and HMO regulations that require coverage of some benefits (Sacramento Bee, 9/10).
The bill's proponents have said that they want to pass the legislation before the October gubernatorial recall election because a Republican governor might be less likely to sign it. Gov. Gray Davis (D) has not taken a position on the bill (California Healthline, 9/9). If enacted, California would be the first state to require employers to offer a specific type of health coverage. According to the Bee, such a law would "all but certainly" be challenged in federal court because the federal Employee Retirement Income Security Act gives federal authority to regulate employer benefits. However, the bill "falls into [a] ... gray area that has yet to be tested in the courts" because ERISA allows states to regulate health insurance, the Bee reports (Sacramento Bee, 9/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.