Assembly shelves Walmart health care mandate — for now

June 28, 2013

By Katy Grimes

SACRAMENTO — For now, Walmart can keep its slogan, “Low prices. Every day. On everything.”

A bill aimed at forcing large non-union businesses to cover the health care costs of all employees, regardless of employees’ part-time status, died in the Assembly Thursday.

Called the “Walmart loophole” bill,  AB 880 was by Assemblyman Jimmy Gomez, D-Los Angeles. It  claimed Walmart and other large, “low-wage employers” are avoiding the new Obamacare health care law by keeping wages low, and workers’ hours to a minimum, so workers would instead qualify for Medi-Cal, the state’s subsidized health care system for the poor and those with low incomes.

The bill sought to make it illegal for a large employer with more than 500 employees to reduce worker hours below 30 a week, the threshold for avoiding Obamacare fines and penalties. The bill was sponsored by the California Labor Federation and the United Food and Commercial Workers.

After three roll call vote attempts to garner the 54 votes needed for a two-thirds supermajority to pass, the bill failed, 46-27.

The significance of this is three Democrats voted “no” on AB 880, and other Democrats did not vote at all on the bill, much to the chagrin of the author and the Democratic leadership.

Voting “no” on the bill were Democratic Assembly members Cheryl Brown of San Bernardino, Tom Daly of Anaheim and Adam Gray of Merced.

Not voting were Democratic Assembly members Raul Bocanegra of Pacoima, Steve Fox of Lancaster, Al Muratsuchi of Torrance, Henry Perea of Fresno, and Rudy Salas of Bakersfield.

Some of those not backing the bill, such as Daly, are in moderate districts and will face tough Republican competition in next year’s elections. They have to show some independence from the unions that dominate the Democratic Party to keep their offices. Ironically, only if they stay in power will Democrats keep their supermajority.

Gomez asked for and was granted reconsideration on AB 880, which will allow the bill to come before the Legislature again in August.

Walmart attack

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,” the official name of Obamacare, according to Gomez.

The real problem is that Walmart, a non-union company, provides jobs to people Democrats would prefer to see dependent on the unions and the government. But as I’ve pointed out before, even low-wage jobs pay the bills for millions of Americans. And many Americans who hold such jobs receive medical benefits already through spouses. Employees over 65 also already are part of Medicare, and will remain so.

“Do we allow the largest and most profitable companies to shirk their responsibility?” asked Gomez during the floor debate I attended.

“I want freedom … from  subsidizing the world’s richest corporations from gaming the system,” said  newly-elected Assemblywoman Lorena Gonzalez, D-San Diego, and a former office holder for the San Diego and Imperial Counties Labor Council, AFL-CIO. “It’s time we stand up for taxpayers against business.”

Of course, if the “Walmart loophole” bill eventually passes, it effectively will be a tax on Walmart forcing up prices paid by shoppers.

“Here it is, we’re already talking about closing loopholes,” challenged Assemblyman Tim Donnelly, R-Twin Peaks, noting that most of America doesn’t yet even know what Obamacare requires because it’s only now being implemented. “We’re already talking about employers as if they are doing something wrong.”

“It’s not someone else’s responsibility to pay for your health care,” Donnelly said. “Health insurance is an individual responsibility. We ought to let the free market control our health care. We’re bringing the force of government to bear on companies that have done nothing wrong. These bills are costing people jobs.”

The bill, 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, effectively a back door increase in the minimum wage.

Opponents to AB 880 say the penalty was written purposely vague with the intent of being very painful to private-sector business.