Governor Gray Davis of California signed SB 2, the Health Insurance Act of 2003, requiring large employers to provide health insurance for their employers. The following articles are reporting the news:
- “Davis approves health care bill: Businesses will need to provide insurance for their workers or pay into a state pool“: the Sacramento Bee
- “Employers expected to fight new worker health insurance law“: SFGate.com
- “Davis signs bill requiring health insurance for workers“: the Associated Press via the Mercury News
Previous posts on the subject can be found here.
This U.S. Newswire from the Foundation for Taxpayer and Consumer Rights -“Calif. Law Could be National Health Care Model if Cost Controls are Adopted, Says FTCR“–is calling on legislative leadership to learn from Hawaii’s experience with a similar law and provide “cost controls”:
Hawaii’s 30-year experience with a similarly constructed “pay or play” system has shown that “without cost controls, the solvency and stability of the health care system is threatened,” according to Flanagan:— After 3 consecutive years of 10-28 percent premium increases, the Chamber of Commerce of Hawaii asked the state legislature and the governor to provide independent oversight of rates in 2002.
— During that same year, health care premiums had increased 250 times faster than medical inflation.
— The Hawaii legislature approved, and the Governor signed, legislation allowing a regulator to deny unfair premium increases.
UPDATE: SFGate.com has posted a very detailed article on the legislation: “Health insurance bill revives national debate.” The article describes how the legislation was specifically written in a way to survive an ERISA challenge:
SB2’s authors used a legal stratagem to skirt ERISA. They contend that the bill does not actually order employers to provide health insurance, but instead requires them to contribute to a new state fund that will buy coverage for the uninsured. Companies could avoid paying this fee if they offer a level of insurance consistent with SB2’s provisions.Supporters say that if SB2 is challenged in court, they will try to get a congressional exemption from ERISA, as the state of Hawaii did. Hawaii, still the only state in the country with employer-mandated coverage, got the exemption because its program was implemented before the law took effect.