LOS ANGELES (AP) — Lawmakers have proposed legislation that would penalize large employers who pay their workers so little that they qualify for government health insurance at taxpayer expense.
Fines of up to $6,000 could apply for every full-time employee who ends up on Medi-Cal, the state’s health insurance for the poor and other vulnerable people, according to the Los Angeles Times.
It’s estimated 130,000 workers from large firms will go on Medi-Cal in the next few years. The fines would be applied for employees who work more than eight hours a week.
Under the federal law, large employers already face fines if they don’t offer health insurance to employees who work more than 30 hours a week. A growing number of employers have gamed that part of the law by cutting workers’ hours to avoid paying for insurance.
Proponents of the legislation include unions, consumer groups and doctors who say, without the bill, a loophole in the Affordable Care Act lets large retailers and restaurants dump hourly workers onto the government dole.
“There are concerns that employers will be gaming this new system and taking less and less responsibility for their workers,” Sonya Schwartz, program director at the National Academy for State Health Policy, told the Times.
The legislation might make employers think twice, Schwartz said.
Opponents say the new legislation won’t result in more health care, just fewer jobs.
“It’s one of the worst job-killer bills I’ve seen in my 20 years in Sacramento, and that says a lot,” Bill Dombrowski, chief executive of the California Retailers Association, told the Times.
It’s estimated nearly 1,800 companies in California that employ 500 or more workers, would be affected by the penalties. The fines would be based on 110 percent of the average cost of health insurance, which was $5,615 in the U.S. last year.
The fines would be used by Medi-Cal to boost payments for doctors and hospitals treating the poorest patients, according to the bill.
Other cash-strapped states are keeping an eye on the bill as they prepare to be stretched thin by a massive health care expansion.
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