Labor-Backed Plan Would Fine Large Employers Who Send Workers to Medi-Cal

The Sacramento Bee by J. Sanders –

April 12, 2013:

A new and controversial proposal in California’s health care overhaul calls for fining large employers if the wages they pay are not high enough to keep workers off Medi-Cal rolls.

Assemblyman Jimmy Gomez will formally unveil the measure as Assembly Bill 880, perhaps today, in a drive sponsored by the California Labor Federation and United Food and Commercial Workers.

“We need to close a loophole that basically allows the largest and most profitable employers in the state to skirt their responsibility to provide health care coverage,” said Gomez, D-Los Angeles.

Wal-Mart and various restaurant chains and janitorial firms are among large businesses that could be affected, said Sara Flocks, a policy coordinator for the labor federation.

The federal health care overhaul planned for next year already promises to fine businesses of 50 employees or more if their full-time workers are forced to buy health insurance from a new state exchange because they are neither covered by an employer plan nor eligible for Medi-Cal.

Gomez’s bill takes the concept of punishment a step further. The threshold for fining businesses under the bill would be lowered to include workers on Medi-Cal rolls, whether they are full-time or part-time employees.

Angie Wei, the labor federation’s legislative director, said the bill is meant to stop efforts by some big businesses to cut benefits and convert full-timers to part-timers, thus making more workers eligible for Medi-Cal and the employer ineligible for a fine under current law.

Assemblyman Dan Logue, R-Marysville, said the legislation would “micromanage businesses” and “is the wrong bill at the wrong time.”

“I’m stunned by it,” said Logue, vice chairman of the Assembly Health Committee. “With this type of overregulation, a lot of these businesses basically are going to relocate or pass the cost onto consumers.”

AB 880’s monetary penalty has not been specified, but the goal is to prod massive businesses to offer health insurance by fining them roughly the cost of providing coverage.

Money raised by AB 880 is meant to increase Medi-Cal provider rates, and to subsidize state costs for it.

The California Chamber of Commerce and California Restaurant Association had not seen AB 880 Thursday and opted not to comment on it.

Wal-Mart defended its practices, saying its wages and benefits, including a health care plan, “typically meet or exceed those offered by a majority of our competitors.”

Hourly store associates also are offered opportunities for quarterly cash bonuses, a health care plan that starts at $17 per pay period, a 401(k) retirement savings plan with company match, promotional opportunities, and a 10 percent discount on merchandise, spokeswoman Delia Garcia said in a written statement.

Source: John & Rusty Report via Choice Admin