BILL ANALYSIS �
AB 1082
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Date of Hearing: April 24, 2013
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hern�ndez, Chair
AB 1082 (Williams) - As Amended: March 21, 2013
SUBJECT : Employment records: reports.
SUMMARY : Requires large employers to report specified
information to the Employment Development Department (EDD) on an
annual basis. Specifically, this bill :
1)Requires an employer with 50 or more full-time equivalent
employees to report to EDD on or before July 1 of each year
all of the following information:
a) The employer's name.
b) The employer's address.
c) The number of employees employed by the employer on
January 1 of the year the report is due.
d) The average number of hours each employee worked per
week for the calendar year before the report is due.
e) Whether each employee was enrolled in minimum essential
coverage under an eligible employer-sponsored health care
plan.
2)Specifies that the report due on or before July 1, 2014 shall
include information for calendar years 2013 and 2014.
3)Specifies that notwithstanding current law, a violation of
this section is not a misdemeanor.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, in 2010 Congress passed the
Patient Protection and Affordable Care Act (ACA) providing
comprehensive reforms to improve access to affordable health
coverage for consumers and protect them from abusive insurance
company practices. Under the ACA, large employers are
classified as those with 50 or more full-time employees and
small employers are those with less than 50 employees, until
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2016. The ACA also defines full-time employees as those who
work an average of 30 hours or more per week.
Starting in 2014, large businesses that do not provide health
insurance to their full time employees will be required to pay a
fine to the federal government if their employees receive
premium tax credits to buy their own insurance. These fines are
meant to offset part of the cost of these tax credits. The fine
for a large employer that does not offer coverage will be $2,000
per full-time employee beyond the company's first 30 workers.
According to the author, since late 2012 and continuing through
2013, the press continues to cite cases in which large employers
across the country are reducing the number of hours many of
their employees work to 28 hours per week. The author contends
that it is possible that large employers are doing so in order
to evade requirements under the ACA which stipulate they must
either provide health insurance coverage or pay a fine to the
federal government.
The author states that this is a troubling trend and clearly
needs to be documented. Therefore, the purpose of this bill is
to determine which large employers in California are evading the
federal mandate to provide health insurance by decreasing the
number of hours their employees are permitted to work. This
tactic shifts the responsibility to provide health care coverage
from employers to state taxpayers who fund both the premium tax
credits in the Exchange and the Medi-Cal system.
The author concludes that this bill is a critical measure to
ensure successful implementation of the ACA by collecting
accurate data.
ARGUMENTS IN SUPPORT
The California Labor Federation states that the ACA, and our
entire health care system, is built on a foundation of
individual, employer and government responsibility. Some
employers, however, can evade the employer penalty by reducing
hours below the 30 hours per week level. Several large
employers - Applebee's, Olive Garden, and Papa John's, among
others - already announced that they are considering reducing
employees' hours below 30 per week to avoid penalties or
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providing benefits.
The California Labor Federation argues that employers who reduce
hours and eliminate benefits for part-timers are essentially
dumping the cost of their employees' health coverage onto
taxpayers. California will shoulder some of the burden of
low-wage workers who end up in the Medi-Cal programs due to
reduced hours. A massive shift of workers onto public health
acre programs would threaten the fragile fiscal recovery of the
state.
The California Labor Federation states that, in order to make
decisions on how to deal with the impacts of the ADA and
Medi-Cal expansion on the labor market and the state,
legislators and the public need to know if employers are
reducing hours and eliminating coverage. This bill will allow
for that data to be collected so that legislators have the
information necessary to make policy decisions as the state
implements the ACA.
COMMITTEE STAFF COMMENTS :
Committee staff and the author's office recently met with
representatives of the Employment Development Department (EDD)
and the Department of Insurance (DOI) to discuss whether this
information may be collected in a more efficient manner by
building upon existing notice and reporting requirements
applicable to employers. The parties also discussed clarifying
which agency or agencies will collect and maintain this
information, and specifying for what purposes the information
will be utilized. Staff is still awaiting feedback from those
agencies, but the author may be amending this bill later in the
process to reflect some of these logistical or clarifying
issues.
REGISTERED SUPPORT / OPPOSITION :
Support
California Department of Insurance
California Labor Federation, AFL-CIO
California State Association of Electrical Workers
Western States Council of Sheet Metal Workers
California State Pipe Trades Council
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Opposition
None on file.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091