BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 1792
AUTHOR: Gomez
AMENDED: May 23, 2014
HEARING DATE: June 25, 2014
CONSULTANT: Bain
SUBJECT : Public benefits: reports on employers.
SUMMARY : Requires the Department of Finance (Finance) to
annually transmit to the Legislature and post on Finance's
Internet Web site a report that identifies each employer that
employs 25 or more beneficiaries enrolled in a public assistance
program (Medi-Cal, CalFresh and CalWORKS). Requires Finance to
determine the cost to determine the total cost to the state of
the aggregated benefits provided to an identified employer's
employees who are beneficiaries under each public assistance
program, and the total cost to the state of the aggregated
benefits provided to each identified employer's employees who
are beneficiaries.
Existing law:
1.Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), and, under which
qualified low-income persons receive health care benefits.
2.Establishes the federal Supplemental Nutrition Assistance
Program (SNAP), under which each county distributes nutrition
assistance benefits provided by the federal government to
eligible households. In California, federal nutrition
assistance benefits are known as CalFresh.
3.Requires each county to provide cash assistance and other
social services to needy families through the California Work
Opportunity and Responsibility to Kids (CalWORKs) program
using federal Temporary Assistance to Needy Families (TANF)
block grant program, state, and county funds. CalWORKS and
CalFresh are administered by the Department of Social Services
(DSS).
4.Requires the director of the Employment Development Department
(EDD) to permit the use of any information in his or her
possession to the extent necessary for any of specified
purposes, and to require reimbursement for all direct costs
Continued---
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incurred in providing any and all information, with specified
exceptions.
This bill:
1.Requires Finance to annually transmit to the Legislature and
post on the Finance's Internet Web site no later than April 15
of each year, a report that identifies each employer that
employs 25 or more beneficiaries enrolled in a public
assistance program (defined as Medi-Cal, CalFresh and
CalWORKS).
2.Defines a "beneficiary" of a public assistance program as an
individual who is both of the following:
a. Enrolled in a public assistance program,
unless the individual is enrolled by reason of
disability or being over 65 years of age or is
employed in a CalWORKs subsidized private or public
employment); and,
b. Employed by an employer for at least one
quarter or three months.
3.Requires the report to include all of the following:
a. The employer's name;
b. The employer's address, as filed with EDD;
c. The total number of beneficiaries each
employer employs;
d. The percentage of the employer's total
workforce in the state that are beneficiaries;
e. The total cost to the state of the aggregated
benefits provided to an identified employer's
employees who are beneficiaries under each public
assistance program; and,
f. The total cost to the state of the aggregated
benefits provided to each identified employer's
employees who are beneficiaries.
4.Requires Finance, in collaboration with the EDD, DHCS, and the
Department of Social Services (DSS), to determine the total
costs to the state of the information in e) and f) above.
5.Prohibits the report, and any list provided to Finance, from
including the name or identifying information of an individual
beneficiary.
6.Requires the report to remain available to the public on
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Finance's Internet Web site for at least five years.
7.Prohibits the above provisions from being construed to
authorize an employer to discourage or prevent an employee
from enrolling or continuing enrollment in a public benefit
program while employed, nor to discriminate against an
applicant for employment or employee for applying to be or
being enrolled in a public assistance program.
8.Requires Finance to be permitted access to and be provided
data and information from other state agencies as required to
implement the above requirements, to the extent not prohibited
by state and federal confidentiality statutes and regulations.
Permits Finance to enter into interagency agreements or adopt
regulations as are reasonably necessary to implement these
requirements.
9.Prohibits an employer from discharging or in any manner
discriminating or retaliating against an employee who enrolls
in a public assistance program, and prohibits an employer from
refusing to hire a beneficiary for reason of being enrolled in
a public assistance program.
10.Prohibits an employer from disclosing to a non-governmental
entity that an employee receives or is applying for public
benefits.
11.Requires the director to permit the use of any information in
his or her possession to enable Finance to prepare and submit
the report required by this bill. Limits the information used
for this purpose to information obtained under this bill and
from the administration of personal income tax wage and the
disability insurance program, and allows this information to
be disclosed to Finance only for the purpose of preparing and
submitting the report and only to the extent not prohibited by
federal law.
12.Requires DHCS and DSS, to the extent not prohibited by
federal law, to annually inform the EDD of the names and
social security numbers of all recipients of the benefits of
the Medi-Cal program, CalFresh, and CalWORKs program.
13.Requires DHCS and DSS to determine the average per individual
cost to the state to provide the benefits of Medi-Cal,
CalFresh and CalWORKS. Requires DHCS and DSS to inform the EDD
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and Finance of these costs in order to calculate the
information that is required to be reported by this bill.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1.Ongoing costs to DSS of approximately $330,000 to $480,000 to
support three to four additional IT personnel and one-time
costs of approximately $165,000 for automation to process and
transmit Social Security Numbers (SSNs) of recipients of aid
under any of the identified programs to the EDD. However, to
the extent that an existing file could be given to EDD for
data matches for the purposes of the bill, the costs could be
significantly lower for DSS.
2.One-time and ongoing costs of approximately $35,000 to $60,000
to EDD to develop a process for extracting and transmitting
data and ongoing costs to annual submit data. EDD estimates
there are 21 million recipients receiving aid from one of the
identified public assistance programs.
PRIOR VOTES :
Assembly Rules: 7- 0
Assembly Labor and Employment:5- 1
Assembly Appropriations: 12- 5
Assembly Floor: 52- 26
COMMENTS :
1.Author's statement. According to the author, the Legislature
and Governor made a strong statement for working Californian
families in 2013 by raising the minimum wage. Yet the debate
continues. As policymakers we have an opportunity to examine
the economic decisions impacting Californians. This bill asks
the questions we as Legislators should know in order to make
reasoned and informed decisions regarding economic policy.
Does the State underwrite business finances by means of social
spending and assistance programs? If so, to what extent are
taxpayer resources redirected to backfill those employers? AB
1792 requires EDD to provide this list to Finance, and would
require Finance to collaborate with EDD to determine the total
cost to the state of the benefits provided to each identified
employer's employees under each public assistance program and
the total cost to the state of the aggregated benefits
provided to each identified employer's employees. The bill
would require EDD to prepare a report with this information
and provide it to Finance.
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2.Related legislation. AB 880 (Gomez), would have required a
large employer, as defined, to pay to EDD an employer
responsibility penalty for each covered employee, as defined,
enrolled in Medi-Cal based on the average cost of
employee-only coverage provided by large employers to their
employees, including both the employer's and employee's share
of the premiums, as specified. AB 880 failed passage on the
Assembly Floor in 2013.
3.Prior legislation. AB 89 (J. Horton), of 2005, and AB 1840 (J.
Horton), of 2006, would have required the Department of Health
Services (DHS was the predecessor to DHCS) and the Managed
Risk Medical Insurance Board to collaborate in preparing a
report that identifies all employers who employ 25 or more
persons who are beneficiaries, or who support beneficiaries,
enrolled in the Medi-Cal, Healthy Families, and Access for
Infants and Mothers programs. Both bills were vetoed by
Governor Schwarzenegger. In his veto message of AB 1840,
Governor Schwarzenegger stated the report would provide little
value and fail to account for the complex and multi-faceted
decision-making process that employees and employers consider
when choosing health insurance. As crafted, the Governor
stated AB 1840 would yield incomplete information, based on
data that most likely cannot be verified, and include only a
subset of employers, employees and their families.
4.Support. This bill is co-sponsored by the California Labor
Federation, United Food and Commercial Workers, Western States
Council, and the Service Employees International Union Local
1000, which states that in 2013, California had the highest
number of working poor families in the country, with more than
one-third of the state's working families are low-income,
making less than 200 percent of the federal poverty line. When
low wages and lack of benefits leave workers unable to make
ends meet, they turn to public assistance programs for health
care, food, and other basic necessities. Supporters argue that
employers that pay low wages and offer no benefits shift the
cost of doing business onto taxpayers, and the cost of
subsidizing low-wage work is not cheap. A recent study found
that taxpayers spend $7 billion annually on public assistance
for fast food workers alone. Supporters argue that employers
that shift their costs onto taxpayers put responsible
employers at a competitive disadvantage, creating an unfair
playing field for business in the state. They also require
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taxpayers to subsidize their business model, rather than
supporting responsible employers. Supporter state that, since
2006, Massachusetts has produced an annual report on which
employers have 50 or more workers enrolled in public benefit
programs. Policy makers have used the report to analyze
utilization and financing of publicly subsidized programs,
identify trends and to track the effect of policies on the use
of public programs. The annual report required by this bill
would give policymakers a deeper understanding of the causes
and sources of underemployment, poverty wages, and the
economic impacts on Californians, businesses and the state
budget, would allow for identifying trends and tracking the
impact of legislation, and can be used by legislators in a
variety of ways to inform and craft effective policies.
Supporters conclude that employers will not have to submit any
documentation to the state, and the report will use only
existing state data, 24 states have released similar data, and
that Massachusetts and Missouri produce annual reports on
employers with workers on public health care programs to the
public.
5.Opposition. The California Chamber of Commerce and business
groups write in opposition to this measure, arguing this bill
will paint a very misleading picture about the factors that
affect utilization of benefits and the different pressures
faced by employers in different sectors of the economy, all of
which could lead to misguided legislation that further burdens
California employers without helping the working poor.
Opponents argue the requirement in this bill that the dollar
amount of benefits utilized by a particular employer's
employees using the average, per individual cost for each type
of benefit undermines the ability to infer anything about an
employers' wages or to distinguish between employers whose
employees receive only minimal benefits in a program and those
whose employees utilize significant amounts of benefits,
particularly for CalFresh and CalWORKS as the average, per
individual cost is problematic because it would reflect
benefits received by unemployed individuals and disabled
individuals who are likely to need a larger benefit, thereby
averaging their level of need with the need of employed
individuals, who should arguably utilize fewer benefits. In
this way, the report would misrepresent the need of employed
individuals and how much the state is spending to provide
benefits to them. Opponents argue this bill would expose
employers to blame for benefits received by these individuals
even though their eligibility does not reflect employer
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policies. Opponents also contend this bill ignores the impact
of household size and the number of employed adults in a
household on eligibility, the measure counts employees who are
out on unpaid leave for extended periods of time, who are
therefore not working and have no income, even though their
need for public assistance does not reflect employer policies,
and the measure does not address concerns about including
seasonal workers in retail and agriculture, as their busy
seasons last longer than three months. Opponents conclude that
this bill will do nothing to drive up wages, make health care
more affordable, or otherwise improve the lives of workers,
and it could actually lead to misinformed policies that would
hurt those very individuals it seeks to help.
6.What should be the public program beneficiary threshold for
the report on employers? This bill requires Finance to
annually transmit to the Legislature and post on Finance's
Internet Web site a report that identifies each employer that
employs 25 or more beneficiaries enrolled in Medi-Cal,
CalFresh or CalWORKS. The Massachusetts report uses a 50
beneficiary threshold and applies it only to employers with at
least fifty employees using public health care programs.
Should the beneficiary threshold in this bill be increased to
employers who employ 50 or more beneficiaries enrolled in a
Medi-Cal, CalFresh or CalWorks?
SUPPORT AND OPPOSITION :
Support: California Labor Federation, AFL-CIO (co-sponsor)
United Food and Commercial Workers, Western States
Council (co-sponsor)
Service Employees International Union, Local 1000
(co-sponsor)
American Federation of State, County and Municipal
Employees
California Conference of Machinists
California Conference of the Amalgamated Transit Union
California Nurses Association
California Professional Firefighters
California School Employees Association
California Teamsters Public Affairs Council
Communications Workers of America, District 9
Engineers & Scientists, Local 20
International Longshore and Warehouse Union, Coast
Division
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Professional & Technical Engineers, Local 21
UDW/AFSCME Local 3930
UNITE HERE
Utility Workers Union of America, Local 132
Western Center on Law and Poverty
Oppose:Agricultural Council of California
California Asian Pacific Chamber of Commerce
California Association for Health Services at Home
California Association of Health Underwriters
California Association of Winegrape Growers
California Business Properties Association
California Chamber of Commerce
California Farm Bureau Federation
California Hotel and Lodging Association
California Manufacturers and Technology Association
California Professional Association of Specialty
Contractor
California Restaurant Association
California Retailers Association
International Franchise Association
Latin Business Association
National Federation of Independent Business
San Jose Silicon Valley Chamber of Commerce
Simi Valley Chamber of Commerce
Southwest California Legislative Council
Torrance Area Chamber of Commerce
UnitedAG
Western Growers Association
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