Voters Reject Mandatory Health Insurance on Employers

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Nov. 4, 2004 Share this on FacebookTweet thisEmail this to a friend

After trailing in the polls for most of the time leading up to the election, opponents of Proposition 72 successfully mounted a publicity campaign on the negative economic impact of the initiative on employers and the subsequent loss of jobs that changed voters minds on the measure.

Prop 72 was an initiative placed on the ballot by businesses to overturn SB 2 authored by Senate President Pro Tem pore John Burton and signed into law by then-Governor Gray Davis last year. The measure would have required employers with 200 or more employees to provide health insurance or pay into a government purchasing pool for their employees and dependents by January 1, 2006 and would have limitted employee contribution to a maximum of 20 percent of the costs. One year later employers with 50 to 199 employees would be covered, followed by employers with 20 to 49 employees in 2007.

Many employers struggling to remain competitive and stay in business in California’s slow economy feared that the cost of the mandate could be the final straw that would put them out of business. In addition, the business community estimated that the measure would be a $7 billion tax on workers, many of whom could not afford the increase.

Businesses across the nation expressed concerns about the affordability of mandated employer sponsored health insurance and were keenly interested in the outcome of Prop 72. The defeat of Prop 72 is a great victory for California employers and workers and good news for employers across the nation.
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