SACRAMENTO

Requires 8% payout for worker benefits, or Medi-Cal funding

by Greg Lucas

Sacramento — California’s largest employers would be required to prop up the state’s medical insurance program for the poor if they don’t offer their workers generous enough health benefits under a bill set for introduction in the Senate.

Modeled after a law passed earlier this month in Maryland that only affected mega-retailer Wal-Mart, the California legislation would require employers of more than 10,000 to spend at least 8 percent of total wages on health benefits.

If they don’t, the company would contribute the difference between what it does pay and the 8 percent threshold to Medi-Cal, the state’s health care provider of last resort.

"Government and entitlement programs are a safety net. They are not supposed to be a place employees from a major corporation are compelled to get their health care because their employer shirks that responsibility," said Sen. Carole Migden, D-San Francisco, who is introducing the bill.

"Why should the taxes paid by the domestic worker or the car mechanic or the school nurse be used to cover costs that should rightly be borne by another worker’s employer?"

Wal-Mart characterizes the bill as just the latest assault by unions who have orchestrated legislative attacks in dozens of states against the giant retailer, whose nonunion workforce totals 1.3 million nationwide with more than 70,000 employees in California.

"Union leaders have been unsuccessful in forcing our associates (employees) to unionize, so they’ve devised a multimillion-dollar campaign to slow down Wal-Mart’s growth,’’ said Kelly Hobbs, a spokeswoman for the retailer in Washington, D.C.

"These bills are nothing more than a political ploy," said Hobbs, noting that three-fourths of Wal-Mart’s employees have health coverage. Roughly 45 percent of the retailer’s employees are insured by the company, while another 30 percent are insured either through a spouse’s plan or Medicare.

Counting Migden’s bill — expected to be in print within the next few days — 22 state legislatures have introduced bills to impose some kind of health care mandate on employers.

The number of businesses affected varies from state to state. Florida, Kentucky and Michigan have 10,000-employee thresholds, as Maryland’s law does, but a bill in Massachusetts affects businesses with more than 10 employees. New Hampshire’s mandate begins at 1,500 employees; Oklahoma’s at 3,000.

The rash of bills has attracted the opposition of the National Restaurant Association and the National Retail Federation, which are helping bankroll a coalition to oppose the measures.

Restaurateurs were instrumental in repealing a California law signed in 2003 mandating larger employers provide health care for their workers.

"These bills are a major threat to business in general and the restaurant industry in particular," said Tom Foulkes, vice president of state relations for the National Restaurant Association in Washington, D.C.

"They do nothing to help the case of the uninsured or fix the health care system in America, which is really the root of the problem. All these bills do is find someone else to pay for it," Foulkes said.

The Maryland law was vetoed last year by the state’s Republican governor. The heavily Democratic-majority Legislature overrode his veto in January.

Only three employers in that state have more than 10,000 employees. Of the three, only Wal-Mart was not unionized.

"Wal-Mart was not the target of the bill," said Maryland state Sen. Gloria Lawlah, a Prince George’s County Democrat who carried the legislation. "The real culprit is the high cost of health care."

Support for Migden’s measure will come from groups like Health Access, an advocacy group that strongly supported the 2003 mandate on employers to provide health coverage.

"Larger employers should pay their fair share and not burden taxpayers and emergency rooms," said Beth Capell, a lobbyist for Sacramento-based Health Access. "People who get up every day and go to work ought to get health insurance on the job. It’s as simple as that."

The number of California companies that would be affected by Migden’s bill is small.

There are 22 companies with more than 20,000 employees in California, 15 with between 15,000 and 19,999 employees and 32 companies with between 10,000 and 14,999 employees, according to the state Department of Economic Development.

Among companies with more than 10,000 employees is Levi Strauss, which has 12,300 employees, according to Forbes magazine. Foster Farms employs 11,000. Pacific Gas and Electric Co. employs nearly 12,000.

Stanford University also has more than 10,000 employees.

Among the state’s largest employers is Oakland-based Kaiser Permanente, which has 33,000 employees. Bechtel has 42,000 employees.

Migden said she doubts that any of those employers would be affected by the bill because they spend more than the 8 percent threshold in her bill on health benefits for employees.

E-mail Greg Lucas at glucas@sfchronicle.com

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