(June 28, 2013) Strong opposition from the California Chamber of Commerce stopped a “job killer” bill from passing the Assembly yesterday. AB 880 (Gomez; D-Los Angeles) would have required the state’s largest employers to pay a penalty for each worker who opted to enroll in the state’s Medi-Cal program.
The bill fell short of the two-thirds vote needed (54 votes) to pass the Assembly.
AB 880 would have discouraged hiring of entry or re-entry workers, increased costly litigation and threatened access to part time work for public assistance recipients. CalChamber argued that the bill was a targeted tax on large employers because it applied a penalty even if the employer offered health care coverage but the employee opted to enroll in the Medi-Cal program.
Under the failed proposal, California employers would have been faced with expanded discrimination litigation due to the creation of a new protected classification for any person who is enrolled in California’s Medi-Cal program or in the California Health Benefit Exchange. The bill affected a wide range of industries, including large nonprofits, all of which would have been hit hard with new significant financial penalties related to health care coverage for their workforce.
AB 880 would have:
Established a new, costly employer mandate. Specifically, AB 880 would have forced larger employers to pay the state an additional penalty for any employee who works twelve hours or more a week and chooses to use Medi-Cal.
Shifted the costs of funding public health programs from government to employers. The additional penalties included in AB 880 were on top of another penalty that the federal health care program already requires. These monies would have gone to the Medi-Cal program, with 10 percent used to fund state bureaucracy.
Reduced part-time workers. AB 880 would have created a disincentive to hiring part-time workers.
Harmed California Companies. AB 880 would have disadvantaged companies who do business in California since it did not apply to companies doing business in other states.
Only eleven of the 37”job killer” bills identified by CalChamber remain active.