Test Case for Employer Contributions Comes in San Francisco
As the health care reform debate in Sacramento continues, Gov. Schwarzenegger remains steadfast in rallying support for his proposal to rework California's health care system. But the Wall Street Journal this week reported what California's health care stakeholders have been saying for a while: A compromise with Democrats to overhaul California's health care system is a more likely result.
The overhaul bill by Democratic lawmakers is gaining ground in the Legislature, winning approval in committees without support from Republicans, who continue to decry its requirements on businesses.
Moreover, Republican lawmakers are among those most skeptical of the legality of the plans put forward by Democrats and the governor, arguing that they violate the 1974 Employee Retirement Income Security Act, a federal law that limits states' authority to regulate health insurance benefits.
A lawsuit underway in San Francisco could serve as a test case for the requirement that employers pay fees to the state if they don't offer health benefits -- a provision of both the governor's plan and the Democratic measure.
In the San Francisco case, the Golden Gate Restaurant Association alleges that a new San Francisco program that includes such payments violates ERISA. The fees collected will go to a city fund used to help cover the cost of health care services for uninsured San Francisco residents.
The governor's team and Democratic lawmakers maintain that their plans don't conflict with ERISA, but business groups hold a different position. The outcome in San Francisco could offer a glimpse of what lies ahead for a statewide effort to compel employers to share a greater portion of the cost of expanding health insurance coverage.
In the meantime, the Legislature this week took action on a bill that would require drug manufacturers to disclose the results of clinical trials, as well as legislation to require insurers to provide paper versions of bills if the policyholder does not consent to electronic billing.