McDonald’s, Franchisees Second-Largest Contributor to Campaign To Repeal Employer-Sponsored Health Coverage Law
McDonald's and its franchisees together are the second-largest contributors to a campaign against Proposition 72, a referendum on the Nov. 2 statewide ballot that would preserve a state law (SB 2) requiring some employers to provide health insurance for employees, the Chicago Tribune reports (Kaiser, Chicago Tribune, 8/19).
SB 2, which is 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 to provide such coverage. By 2007, employers with 50 to 199 employees will have to provide health insurance to workers only. Companies with fewer than 20 workers will not have to comply with the law, and the law also will exempt employers with 20 to 49 workers unless the state provides them with tax credits to offset the cost of health coverage (California Healthline, 8/12).
Recent state filings by a group that supports SB 2 indicate that McDonald's and its franchisees have made more than 500 contributions totaling $788,000 -- more than half of the campaign's total contributions. The California Restaurant Association ranks first in contributions, with $1.2 million donated to the effort. Several other businesses and restaurants have helped raise $6.5 million for the campaign against Proposition 72, according to the Tribune. The California Chamber of Commerce plans to raise $12 million to $15 million for the campaign, according to chamber President Allan Zaremberg.
The implementation of SB 2 would "heap significant new costs" on businesses such as McDonald's, Sears Roebuck and smaller firms that do not offer health insurance, according to the Tribune. In a statement, McDonald's said it is opposing the legislation because it "could limit [the company's] ability to re-invest in the California economy."
Zaremberg said, "You shouldn't have to turn everybody's health care upside down to address the need of improved access. When you're the only state in the continental U.S. that has an employer mandate, you know that puts you at a competitive disadvantage for jobs."
Alina Salganicoff, a vice president at the Kaiser Family Foundation, said, "If they can [implement SB 2] successfully, I think you are going to see this in other states."
Consumers Union attorney Earl Lui said, "I don't think the economy is going to crumble if McDonald's has to offer health care coverage" (Chicago Tribune, 8/19).
The ballot title and summary for Proposition 72 is available online. Note: You must have Adobe Acrobat Reader to access the summary.
Additional information on SB 2 is available online.