A California Chamber of Commerce-opposed “job killer” bill
that requires the state’s largest employers to pay a penalty for each worker
who opts to enroll in the state’s Medi-Cal program will be considered by the
Assembly this week.
(Gomez; D-Los Angeles) increases health care costs and increases discrimination
litigation by assessing large employers a penalty if any of their employees who
work as little as eight hours per week enroll in California’s Medi-Cal program.
The bill also expands
the Labor Code to include a protected classification for any person who is
enrolled in California’s Medi-Cal program or in the California Health Benefit
Exchange. Because of the urgency clause, AB 880 remains active on the Assembly
The bill affects a wide range of industries, including large nonprofits, all of which would be hit hard with new significant financial penalties related to health care coverage for their workforce.
Savings Accounts (HSA) are pre-tax accounts available to individuals who are
covered under a high-deductible health plan. Eligible individuals can
accumulate money, tax-free, in HSAs to pay for qualified medical expenses in
the face of rising health insurance costs.
The IRS announced higher limits for HSA
contributions for 2014. To
participate in an HSA, the policyholder must, among other requirements, be
enrolled in an HSA-qualified high-deductible health plan with a minimum annual
year 2014, a high deductible health plan is defined as a health plan with an
annual deductible that is not less than $1,250 for self-only coverage or $2,500
for family coverage. This is unchanged from 2013. However, the maximum
annual out-of-pocket expenses (deductibles, co-payments and other amounts — but
not premiums) have increased.
For 2014, the
maximum out-of pocket amounts cannot exceed $6,350 for self-only coverage or
$12,700 for family coverage — a change from the 2013 out-of-pocket maximums of
$6,250 (self-only) and $12,500 (family).
The annual maximum HSA contribution for 2014 is:
$3,300 for individuals with self-only coverage (an increase of $50 from 2013)
$6,550 for family coverage (an increase of $100 from 2013)
CalChamber has produced and helped distribute a series of videos to explain
important aspects of the federal Affordable Care Act (ACA) for businesses,
particularly smaller operations. Even as health care plans gear up to begin
enrolling people this fall to be covered in 2014; many questions remain about
how the law will work.
video we produced (in cooperation with The California Endowment) explains how Covered California, the state’s online insurance marketplace, will
provisions of the ACA are explained at HealthLawGuideforBusiness.org,
a website developed by The California Endowment with support from business
partners, including the CalChamber.
We also are planning a webinar series to explain key employer provisions of the
federal law. First up is the “Strategies
for Employer Compliance Under the Affordable Care Act” webinar,
set for Thursday, June 20. The CalChamber will moderate a 90-minute
presentation by experts from Groom Law Group, a Washington, D.C.-based firm.
The webinars are free to CalChamber members.
webinar is scheduled for August 1; Moss Adams LLP will discuss the ACA’s tax
implications. Finally, the third webinar is scheduled for August 15; Wells
Fargo Benefits has partnered with CalChamber to discuss employee benefits
related to the ACA.
It’s decision time. Key components to the
Patient Protection and Affordable Care Act (PPACA) take effect January 1, 2014,
and the new rules are complicated.
Do you keep health insurance coverage the same
or reduce benefits to contain costs? How do you meet compliance requirements
without risking costly penalties or impacting your ability to attract
employees? Let the experts be your guide before you decide.
June 20 marks the first of CalChamber’s PPACA
compliance webinars featuring top experts. On that date, special guest
presenters Brigen Winters and Tamara Killion of Groom Law Group in
Washington, D.C., will verify and clarify key employer provisions as you
prepare to implement health care reform.
Moderated by CalChamber, the 90-minute
webinars are free to CalChamber members and $99 each for nonmembers — while
seats are available. Can’t make the live event? Request the recorded version.
On May 30, CalChamber released the latest edition of CalChamber News, a video series focusing on issues important to job creation and economic recovery in California. That edition features a job killer bill, AB 880 (Gomez; Los Angeles), that would require the state's largest employers to pay a penalty for each worker who opts to enroll in the state’s MediCal program. The bill impacts a wide range of industries, including large non profits, all of which would be hit hard with new significant financial penalties related to health care coverage for their workforce.
AB 880 is currently on the Assembly Floor awaiting a vote this week. CalChamber and a large coalition of businesses and non-profits have argued that this “ job killer” bill will cause significant collateral damage to the recovering economy and result in fewer new jobs.
"The math just doesn't add up," says CalChamber President and CEO Allan Zaremberg. "When you drive up costs you hire fewer people. I don't think there is any question that this is a job killer," he said.
In the video, Zaremberg explains that AB 880 imposes a new tax on California employers when they hire part time employees, it shifts the burden of paying for a MediCal program in California from the public sector, from the state, over to the private sector, and eliminates any reason to do efficiencies in the program.
AB 880 requires large employers to pay a penalty anywhere from $6,000 to $15,000 for each worker who opts to enroll in the state's MediCal program. Employers will still have to pay the penalty even if they offer their own coverage and it also extends to part time and seasonal workers, even those working as little as eight hours per week.
This “job killer” spells doom for nonprofits like the California Community College Foundation which employs hundreds of part time tutors to work with disadvantaged youth.
"This bill would actually be devastating to our organization," says Rick Fowler president and CEO of the Community College Foundation. " I do not see how we could continue to be inexistence. It would put us out of business."
In the video, Fowler explains that what California needs most is a health private sector economy and this bill is a “body blow” against that.
CalChamber warns that AB 880 will also increase frivolous litigation and limit the ability of businesses to manage their own workforce. Employers are prohibited from asking about a worker's family income or enrollment in MediCal.
The concern is not just more uncertainty in the face of implementing the Affordable Care Act, but the inability for entry level, unskilled workers, students and older workers to find jobs.
While we may provide information about laws and regulations, the information should not be construed as legal advice. Because CalChamber does not provide legal advice, we cannot discuss the application of law to your specific circumstances.