Legislature Likely To Consider Employer-Paid Health Care Bill This Week

The Legislature, which adjourns Friday, this week likely will consider a bill (SB 2) that would require many employers in the state to provide employees with health insurance or pay into a state fund that would provide coverage, the Contra Costa Times reports (Adamy, Contra Costa Times, 9/9). Under the bill, sponsored by Senate President Pro Tempore John Burton (D-San Francisco) and Sen. Jackie Speier (D-San Mateo), employers with more than 200 workers that chose not to pay into the fund would have to provide health care for employees and their dependents by Jan. 1, 2005. Businesses with 20 to 199 workers would be required to cover employees, but not their dependents, by Jan. 1, 2006, or pay into the fund (California Healthline, 9/3). While supporters maintain that the legislation would expand access to health care for an estimated 2.5 million uninsured workers and dependents in the state and would benefit "virtually every interest group, opponents contend that the bill would lead to higher health care costs for employers and would force them to lay off employees, relocate or file for bankruptcy, the Los Angeles Times reports (Ingram, Los Angeles Times, 9/9).

The California Chamber of Commerce, which opposes the bill, yesterday released a study that estimated that the legislation would require small and medium-sized employers to pay $5.7 billion per year in health care costs and would require employees to pay $1.5 billion per year. However, according to the California Medical Association, the bill would require employers that do not currently provide health insurance to employees to pay $600 million to $1.3 billion per year and employees to pay $150 million to $350 million per year (Contra Costa Times, 9/9). Some state lawmakers have proposed a provision that would provide employers with a state subsidy to help cover the cost of health insurance for employees, but such a provision appears unlikely because of the state budget deficit, the Los Angeles Times reports. Burton also said that he would study whether a tax credit system would help employers, and supporters of the bill said that they would consider cost-control provisions.

The Legislature earlier this year planned to delay debate on the bill and focus on reforms to the state workers' compensation system, but the Oct. 7 gubernatorial recall election has "given new priority" to the issue for Democrats, who have concerns that a Republican governor would not enact the legislation, the Los Angeles Times reports. Burton said that he is "bound and determined to see a measure pass during this season." Aides for Gov. Gray Davis (D) said he has not taken a position on the bill (Los Angeles Times, 9/9). KCRW's "Which Way, L.A.?" yesterday included a discussion of SB 2. Guests on the program included Angie Wei, legislative director of the California Labor Federation AFL-CIO, and Allan Zaremberg, president of the California Chamber of Commerce (Olney, "Which Way, L.A.?," KCRW, 9/8). The full segment is available online in RealPlayer.