Legislation Threatens to Force CA Employers to Pay for Health Care

June 11, 2007 (PLANSPONSOR.com) - A bill passed by the California Legislature would force employers not providing health coverage to their employees to contribute to a state-run health care purchasing pool and require insurers to guarantee the issuance of policies to individuals.

The two bills, which would require that employers spend at least 7.5% of their payrolls on health insurance, were passed on June 7, with the Assembly proposal garnering a 47 to 32 vote and the Senate version getting a 23 to 16 approval.

Assembly Speaker Fabian Núñez and Senate President Pro Tem Don Perata must now reconcile the two versions of the bill — A.B. 8   and S.B. 48 – before sending it off to Governor Arnold Schwarzenegger .  

In December 2006, Perata unveiled his version of the proposal, which would give employers a choice of providing health insurance to their employees or contributing to a state purchasing pool – dubbed the Connector – that would then negotiate the best health coverage rates   (See CA Senator Proposes Worker Health Care Plan ).

Under Perata’s proposal, a certain percentage of California employees’ Social Security wages must go toward employee health insurance costs. The proposal also would require all working Californians and their families to have health care coverage at a minimum benefit level to be determined and would be required to present proof of health care coverage or lose tax credits for themselves and their dependants.

The proposal would expand the Healthy Families program and Medi-Cal – which cover uninsured residents – to cover all eligible children and their parents up to 300% of the federal poverty line. Federal funds for the program would be matched by employer and employee contributions through the Connector.

Universal Health Care Bill Gains Senate Nod

The Senate passed on June 6 universal health care proposal ( S.B. 840 ) authored by Senator Shelia Kuehl, which wouldestablish the California Universal Healthcare System to be administered by the newly created California Universal Healthcare Agency.

The bill would make all California residents eligible for specified health care benefits under the California Universal Healthcare System, which would, on a single-payer basis, negotiate for or set fees for health care services provided through the system and pay claims for those services.

Schwarzenegger rejected the proposal led by Kuehl in September 2006 that barred private companies from selling health insurance contracts for services provided by the state (See Schwarzenegger Turns Away Universal Health Proposal).