Powerful CA unions pushing ‘fair share health care’

May 29, 2013

By Katy Grimes

Labor unions are on the attack and using the legislative process to take down Walmart and other non-union businesses using the Affordable Care Act, also called Obamacare

A bill aimed at forcing large non-union businesses to cover the health care costs of all employees, regardless of employees’ part-time status, is making its way through the Legislature.

United power

Democrats claim Walmart and other large, “low-wage employers” are avoiding the Obamacare law by keeping wages low, and workers’ hours to a minimum, so workers qualify for Medi-Cal, the state’s subsidized health care system for the poor and those with low incomes.

Obamacare already includes a provision to fine large employers if their full-time employees are forced to purchase a health plan on the new state health insurance exchange. That’s because the employees already are ineligible for Medi-Cal, or do not have employer-based coverage.

Labor unions justify their claims against Walmart because the über-retailer pays its executives millions in salaries each year, so there is no reason the company should get away with shifting its employee health care costs onto taxpayers.

The big penalty

The “Walmart loophole” bill, AB 880, by Assemblyman Jimmy Gomez, D-Los Angeles, seeks to make it illegal for a large employer to reduce worker hours below 30 a week to avoid Obamacare fines and penalties.

AB 880 would require large employers to “pay their fair share when they dump workers onto Medi-Cal by cutting hours or wages in order to circumvent their responsibilities under the Affordable Care Act,” according to Gomez.

The law, classified as a “job-killer” by the California Chamber of Commerce, would also penalize employers whose wages are too low to keep employees off of Medi-Cal.

AB 880’s penalty is written purposely vague with the intent of being very painful to private-sector business. The proposed penalty on employers is based on 110 percent of the average cost of health care coverage. This includes both the employers’ and employee’s share of the premium.

Based on conservative estimates, the employer penalty will average more than $6,000 per employee. According to the Kaiser Family Foundation, that is more than three times the federal penalty for not providing healthcare to an employee under the Affordable Care Act.

The motive

The real problem is that Walmart, a non-union company, provides jobs to people Democrats would prefer to see dependent on the government and on welfare.

But even low-wage jobs pay the bills for millions of Americans.

While the stated goal of AB 880 is to prod large businesses to offer health insurance by fining them more than the average cost of providing coverage, the money raised by AB 880 is meant to increase Medi-Cal provider rates, and to subsidize state costs for it.

In a sneaky provision in the bill, the proposed law also exempts the government as an employer. The bill says, “Large employer’ shall not include a state, city, county, city and county, district or any other governmental employer. … An employer responsibility penalty shall not be incurred by a state, county, city, city and county, district, or any other governmental entity.”

Pay your fair share, or else…

At the heart of the Affordable Care Act is the idealistic notion of “shared responsibility” between employers, employees and the government, contributing to a stable, affordable health care system for all.

This might have been possible 50 years ago before states and the federal government began heavily regulating insurance companies into submission.

I can already see tomorrow’s headlines: “Walmart forces Obamacare to turn to single payer system.”

“Single-payer” is a term used to describe a type of financing system in health care. A single-payer system would be setup such that the government would collect all health care fees, and pay out all health care costs.

A single-payer system was the original intent of Obamacare. In that vein, California’s Democratic politicians have embraced early implementation of Obamacare before any of the other states.

The way to get to a single-payer system is to force employers to pay the health insurance for all employees — part time and full time. When employers balk at this, single-payer will be ushered in.

A Google search of “Walmart” and “Obamacare” finds hundreds of stories blasting the evil super-retailer for providing low-paying jobs without benefits.  Democratic lawmakers claim large employers are trying to game the system merely because Walmart wants to retain the option of staffing with part-time workers.

“Fair share health care”

Sponsored by the California Labor Federation and the United Food and Commercial Workers, two of the largest, most aggressive labor unions in the state, the bill aims to force large non-union businesses to cover all employees, regardless of employees’ part-time status.

The labor union-run campaign, called “Fair share health care,” has collected nearly 12,000 petition signatures. The campaign is busing in large groups of union members to the Capitol all week to swarm legislative offices.

The Affordable Care Act already allows businesses of 50 employees or more to be penalized if their full-time workers are forced to buy health insurance from a new state exchange because the workers are neither covered by an employer plan nor eligible for Medi-Cal. But that’s not enough of a disincentive.

I was the Human Resource manager for 20 years with a large manufacturing company. We had many entry-level, minimum wage positions, and used part-time employees whenever possible, depending on the production needs of the company.

The company provided health benefits to all eligible full-time workers. But many of the lower paid full-time workers declined the company-provided insurance and instead signed up for Medi-Cal. There was nothing we could do about this.

The federal government and individual states meddled so long in insurance regulation, they drove the best health care system in the world to the brink of disaster. And instead of getting out of the way to allow for a free-market correction, President Barack Obama and the Democratic Congress of 2010 made an unholy deal with the health care industry in a fateful story of the ugliest form of crony capitalism.

Now states are either embracing Obamacare, or rejecting it. California lawmakers love it.