CA Appeals Court Pulls Out of Health Insurance Fight

January 9, 2004 ( - Citing a former judge's current legal involvement in the battle requiring many employers in California to help pay for their workers' health insurance, the 3rd District Court of Appeal has recused itself from the case.

The appeals court is concerned about a possible conflict of interest in the case due to former Judge Daniel Kolkey’s involvement as an attorney for business groups fighting the California law mandating employer-sponsor health-care coverage. Thus, the court has requested the state Supreme Court handle the legal issues surrounding the case or hand them off to another appeals court, according to a report.

At issue currently is an attempt by business groups to bring the recently enacted measure to a March 2004 ballot. Under the measure, employers in the Golden State with 200 or more workers are required to offer insurance for employees and their families starting in 2006 or pay fees to support a statewide insurance program. Firms with between 20 and 199 employees will have to give workers, but not their families, insurance by 2007or pay similar fees to the state. In most cases, companies will pay at least 80% of the monthly insurance premium, leaving workers to pay no more than 20% of the tab (See CA Governor Inks Health Care Bill ).

This did not fly with small business owners, who cited the costs associated with such a move. Led by the Chamber of Commerce and the California Restaurant Association, opponents of the law gathered more than 620,000 signatures to try to force a voter referendum on the measure. The secretary of state’s office said the opponents had gathered enough valid voter signatures to force a referendum, but election officials held off putting the question on the ballot pending the outcome of a lawsuit filed by the state Senate sponsors of the bill challenging the validity of the opponents’ referendum petitions (See Business Coalition Seeks Reversal of CA Health-Care Bill ).

In the initial legal round, a Sacramento County court ruled that the petitions did not give potential signers enough information about what the law would do and issued an order blocking the referendum (See Anti-Health Coverage Law Referendum Grinds to Halt ). Business groups appealed the ruling to the 3 rd District.

However, the 3 rd District Court’s decision muddies the waters around the issues, making it more unlikely that an attempt by business groups to overturn the insurance mandate will make the March 2 ballot because of tight printing schedules for the election. The California Supreme Court has handed the case to the 1st District Court of Appeals in San Francisco.