Small Businesses Concerned About Governor’s Health Proposal
Some small business owners are voicing concerns about provisions of a health care reform plan Gov. Arnold Schwarzenegger (R) announced on Monday, the Sacramento Bee reports (Chan, Sacramento Bee, 1/12).
Under the governor's plan, Medi-Cal and Healthy Families would be expanded to help provide coverage to low- and moderate income state residents, and individuals who declined to carry insurance could face a reduction in state income tax refunds or have wages withheld.
The $12 billion plan also would require contributions from employers, individuals, insurers and medical providers (California Healthline, 1/9). Firms with at least 10 employees that do not offer health insurance benefits would have to pay 4% of their payroll to a state fund that would help provide health insurance benefits to state residents.
Administration officials and legislators have not negotiated "exact details and costs to all parties," the Bee reports.
According to the Bee, business leaders said the plan could result in:
- More businesses moving to the "underground economy" to avoid paying taxes;
- Employers hiring more part-time workers in place of full-time employees;
- Firms reducing staffs; and
- Companies dropping plans to increase hiring.
Health and Human Services Agency Secretary Kim Belshé said that most California employers already provide health insurance benefits and would not be affected by the proposed 4% contribution requirement.
About 67% of all California employers provide insurance benefits, according to a 2004 survey by the California HealthCare Foundation. Among businesses with 10 to 49 employees, 81% offer health benefits, and 55% of businesses with three to nine employees provide health benefits, the study found (Sacramento Bee, 1/12).