San Francisco Chronicle Examines Campaigns From Opponents, Supporters of Employer-Sponsored Health Coverage Law
The San Francisco Chronicle on Friday considered Proposition 72, an initiative on the Nov. 2 statewide ballot that asks voters to uphold or reject SB 2, a state law that will require some employers to provide health insurance to their employees or pay into a state fund to provide such coverage (Raine, San Francisco Chronicle, 10/15).
Under Proposition 72, state residents can vote "yes" to uphold or "no" to repeal SB 2.
Under the law, 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 (California Healthline, 10/12). It is estimated that SB 2 would provide health insurance to 1.1 million employed state residents and their children who lack coverage, according to the Chronicle.
According to the Chronicle, upholding SB 2 would "extend the post-World War II bonus of employer-paid health insurance just as employers are shifting more of the cost burden to workers."
The campaign against Proposition 72 is led by the California Chamber of Commerce, which has said the measure would cost employers about $5.7 billion to fund "a massive new state bureaucracy that would provide public health benefits.''
Those opposed to the measure say companies will go out of business or leave the state because of the cost of compliance with the law. In addition, employees could lose their jobs if companies cannot provide health benefits, and other businesses could choose not to hire additional workers to avoid the law's requirements, opponents say. Opponents say employees would pay an additional $1.5 billion out of-pocket whether or not they want health coverage.
Kim Parker, executive vice president of the California Association of Employers said, "To stay competitive, businesses will have to find ways to cut costs in other areas, perhaps by moving out of state altogether or simply not hiring or even terminating employees. A better and more creative approach would be to offer a tax benefit to offset the cost of heath insurance."
The California Restaurant Association has contributed more than $1.2 million to the campaign and McDonald's, its franchises, Yum Brands -- which includes KFC, Pizza Hut and Taco Bell -- and Carl's Jr; each has donated $600,000 to $800,000.
The campaign in support of the measure is directed by the California Medical Association. Health advocacy group Health Access and "various consumer representatives," also support the measure, according to the Chronicle.
People who support upholding SB 2 say that providing health insurance to employees of large companies would reduce the number of uninsured state residents. They say that the law will lower state health costs because the state will subsidize fewer emergency room visits.
CMA CEO Jack Lewin said, "This law will save lives and money by providing one million Californians with health coverage and access to medical care. It is a dramatic step in solving not only our state's uninsured problem but also in dealing with the crisis in our emergency rooms. It should serve as a model for the rest of the nation'' (San Francisco Chronicle, 10/15).
Additional information on Proposition 72 is available online.