Date: Jun 25, 2013

California’s biggest labor unions are attempting to advance legislation that would impose penalties on employers with more than 500 employees if any of their workers choose to access Medi-Cal instead of employer-offered health benefits, even if those benefits meet the requirements of the Affordable Care Act.  Unions argue that the penalty is necessary to prevent large employers from shifting employees to Medi-Cal rather than offering affordable health care benefits.

AB 880 (Gomez, D-L.A.) is awaiting action on the Assembly floor.  The bill requires a two-thirds vote (54 votes) due to a provision that would have it take effect immediately.  Democratic leaders in the Assembly are likely to bring the bill up for a vote this week while their party still has 54 seats.  A Democratic Assemblymember will leave the Assembly at the end of the week to take a seat on the L.A. City Council, leaving the majority one vote shy of two-thirds, possibly for the rest of the 2013 session. 

Western Growers is part of a large business coalition opposed to AB 880, noting that the bill would unfairly require California employers to pay an additional penalty that is three to six times larger than the federal health care penalty assessed against employers who fail to offer qualified health benefits. AB 880 unfairly punishes employers who offer health care coverage – even to employees who work only 12 hours a week and 45 days in a calendar year – but whose employees still choose to use Medi-Cal. The AB 880 penalty is 110 percent of the average cost of health care including both the employer and employee share of the premium, and is estimated at between $6,000 and $15,000.

WG Staff Contact

Dave Puglia
President & CEO

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