Workers, Businesses Debate Mandatory Employer-Sponsored Health Insurance

The AP/Long Beach Press-Telegram on Sunday looked at opposing views on Proposition 72, a Nov. 2 ballot initiative under which state residents can vote to uphold or reject a law (SB 2) that will require some employers to provide health insurance to their employees or pay into a state fund to provide such coverage (Lawrence, AP/Long Beach Press-Telegram, 9/19).

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 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, 9/20).

Supporters of SB 2, including Insurance Commissioner John Garamendi (D) and the California Federation of Teachers, say it would expand health coverage to 1.1 million of the 6.5 million state residents who currently lack health insurance and prevent large and medium-size companies from dropping health insurance or reducing their share of the cost to less than 80%.

Kenneth Burt -- political director for CFT, which has donated $300,000 to the 'Yes on 72' campaign -- said that the law would prevent employers from shifting health care costs to the public by forcing emergency departments to cover the cost of treating their uninsured employees. Burt said, "We don't believe it's fair for people who work for large corporations like Wal-Mart to have health insurance paid for by taxpayers. An increasing percentage of our health care premiums is going for the uninsured."

Sen. Jackie Speier (D-San Mateo), who helped write the law, said that 80% of businesses in California offer health insurance to employees, adding that some who debated the need for SB 2 "would argue that we already provide insurance but not at the same level." Speier said that although SB 2 will not address the uninsured situation in California completely, the state is not prepared to implement a universal health care system. She said, "There's not the political will nor the financial. The health care system is so dysfunctional right now you could not impose universal health care."

Jot Condie -- vice president of the California Restaurant Association, which has donated $1.2 million to the campaign asking voters to reject SB 2 by voting "no" on Proposition 72 -- said, "Our industry can't afford not to fight this. It's a very low profit-margin industry. We expect about 20% of our membership to go under the first day this takes effect." Condie added, "If anything good is to come of this ... it will cause a debate that's more inclusive."

Clay Paschen, who runs 11 McDonald's restaurants in Ventura County, said, "We've got to find ways of making coverage more affordable. We've got to do cost containment. Those kind of things have to come on a national level" (AP/Long Beach Press-Telegram, 9/19).

Additional information for Proposition 72 is available online.