“Job Killer” Bill Increases Discrimination Litigation, Imposes New Penalties

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.

AB 880 (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 Floor.

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.

Visit CalChamber.com for complete coverage.

2014 Health Savings Accounts and Flexible Spending Limits Announced

Health 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 deductible.

For calendar 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)

For more information, visit the IRS website. 

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

CalChamber Helps Explain Federal Health Care Law

The 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.

The third video we produced (in cooperation with The California Endowment) explains how Covered California, the state’s online insurance marketplace, will work.

Business-specific provisions of the ACA are explained at HealthLawGuideforBusiness.org, a website developed by The California Endowment with support from business partners, including the CalChamber.

Webinars
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.

The second 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.

Prepared To Implement Health Care Reform?

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.

Webinar: Strategies for Employer Compliance Under the Affordable Care Act
Date: Thursday, June 20, 2013
Time: 10 a.m. – 11:30 a.m. PT
Cost: FREE to CalChamber members; $99 for nonmembers 

Slated for August are two more webinars on PPACA compliance with presenters from Moss Adams and Wells Fargo Insurance Services.

CalChamber News: Health Care Tax Doesn’t Add Up

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.