Who says employers should make health insurance available to employees? House Dems do

The House Democratic leaders have unveiled a draft health care reform plan that includes, among the numerous other provisions (850 pages of them), an employer mandate. A summary of the plan indicates that “employers have a responsibility to help make health insurance available for their employees. Businesses that do not offer health coverage to their workers have an unfair competitive advantage over businesses that cover their employees.”

Regarding the employer mandate, the proposal provides as follows:

• Employers would contribute 72.5 percent of the cost of premiums for all full-time employees’ health coverage and 65 percent for a family policy.

• Employers would have the option of providing part-time employees with health coverage by contributing a share of the expense, or contributing to a health insurance exchange in order for part-time employees to seek coverage there.

• In the fifth year after the exchange begins, companies that offer health insurance would have to meet minimum coverage standards like those required of plans in the exchange.

• If an employer chooses not to offer health coverage to its employees, a penalty will be assessed based on the size of payroll. That penalty will help employees find coverage in the exchange.

What about small employers? The summary of the plan indicates that employers with annual payrolls under a certain limit would be exempt from the requirement to provide health insurance to their workers. However, workers would still be eligible to get coverage through the exchange. Other small businesses would be eligible to receive a 50-percent health care credit toward the expense of providing coverage to their employees.

Would mandate end battle by the bay? The Golden Gate Restaurant Association (GGRA) has been battling San Francisco’s employer mandate since 2007. In early June 2009, the GGRA asked the U.S. Supreme Court to review the Ninth Circuit's decision in Golden Gate Restaurant Association v. City and County of San Francisco. In September 2008, the Ninth Circuit found that San Francisco's Health Care Security Ordinance, which requires covered employers to make minimum health care expenditures for their employees (either directly or by paying into the Healthy San Francisco program), was not preempted by ERISA. In October, the Supreme Court will decide whether to review the case.

Hmm . . . October. Isn’t that the deadline President Obama set for signing health care legislation?

So, if legislation containing a federally imposed employer mandate is signed before the Supreme Court decides whether to review the San Francisco case, the ERISA preemption issue on the San Francisco mandate probably would be moot. That’s if the law is written so that the new federal mandate overrides state (or city) mandates (but where would that leave the Massachusetts’ law and Hawaii’s ERISA waiver, I wonder?). If that’s how it plays out, the Supreme Court wouldn’t have to wade into the preemption morass . . . at least not in its next term.