Pay Reductions, Other Possible Employer Responses Could Limit Effect of Employer-Sponsored Health Coverage Law
Employer and employee responses to SB 2, a state law that will require some workers to provide health insurance to their employees or pay into a state fund to provide such coverage, could reduce the net effect of the mandate on the number of uninsured in the state, according to a Health Affairs report (Sinaiko, Health Affairs, 10/13).
Under SB 2, employers with 200 or more employees will be required to provide health insurance to workers and their dependents by 2006 or pay into the state fund. Employers with 50 to 199 employees will have to provide health insurance only to workers by 2007.
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.
Proposition 72, an initiative on the Nov. 2 statewide ballot, asks voters to vote "yes" to uphold or "no" to repeal SB 2 (California Healthline, 10/12).
The analysis, based primarily on data from the 1997 Robert Wood Johnson Foundation Employer Health Insurance Survey and the 2001 California Health Interview Survey, found that changes in worker and employer behaviors as a result of the mandate could reduce the number of workers expected to receive coverage through SB 2. Estimates have found that under current conditions, more than one million uninsured residents would receive health coverage under SB 2.
The analysis concludes, "Policymakers assessing whether the employer mandate is a good reform model should pay close attention to these potential consequences" (Health Affairs, 10/13).