LegAlert: Fair Share Health Care

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In Monday's Stateside Dispatch, we gave an update on the progress of "fair share" health care legislation in the states. This LegAlert is designed to give a few more details on the legislative models currently being debated, key resources available to use supporting them in your state, and talking points on responding to common arguments by opponents.

Broadly, the key models fall into four groups:
  • the Maryland model applying almost exclusively to large companies like Wal-Mart;
  • the New York City/Suffolk County model applying exclusively to larger grocery stores;
  • the Massachusetts model covering almost all employers, but with weaker health care mandates for firms than the other models, and
  • the New York State model covering most employers with one hundred plus employees and requiring robust health care benefits for employees.

The Maryland Model New York City/Suffolk County model
  • Both enacted into law Oct. 2005.
  • Full text here (NYC bill).
  • Grocery stores with 35 or more employees or other retail stores with 10,000 square feet or more of food will be covered -- this means supermarkets, gourmet groceries, and "big box" stores that sell food -- and will be required to provide approximately $2.50-$3.00 of health care benefits for each hour an employee works.
  • Key supporting organization for NYC bill was NYC Health Care Security Act coalition with this list of coalition supporters.
Massachusetts Promoting Access To Healthcare (PATH) model
  • Passed by Mass. House of Representatives in November 2005.
  • Full text here.
  • Bill requires all businesses with 10 employees or more provide insurance to their employees worth 5-7% of their payroll costs or pay the difference to the state to cover costs for the state's uninsured.
  • Key supporting organization is MA Health Care for All.
New York State Fair Share for Health Care model
  • Introduced March 2006.
  • Summary here.
  • Firms with more than 100 workers, and building services at office buildings over 100,000 square feet and residential buildings with 50 units or more are required to provide health benefits worth at least $3 per hour of work or pay the difference to the state. Farms and manufacturers are exempted.
  • Key supporting organization is the Working Families Party and this list of coalition supporters (Excel format).
  • New Jersey is pursuing a similar bill for employers with at least 1000 employees.

Q & A on Fair Share Legislation

What are key choices in the design of fair share legislation?

  • Political considerations and your coalition strength will determine how comprehensive a law should be.
  • A number of states are using the Maryland model to demand that a few large employers like Wal-Mart provide a decent level of health care benefits and establish the principle of employer responsibility for health care.
  • Massachusetts activists are pushing to cover a far larger percentage of employees with a lower level of mandated benefits on the assumption they can increase the benefit levels in the future.
  • The New York State coalition is pursuing an intermediate approach covering fewer employers than Massachusetts, but requiring a more robust level of health care benefits than either Maryland or Massachusetts.

What are the key arguments in favor of fair share legislation?

  • 45.8 million Americans, or 15.7 percent of the population, lacked health insurance in 2004-- a number that is rising as more employers drop coverage for their workers.
  • Employers that do the right thing and provide health care to their employees face unfair competition from irresponsible employers that dump their health costs on the public.
  • Hospitals nationwide end up providing health care for these uninsured workers, driving up the insurance premiums for everyone and costing taxpayers tens of billions of dollars.
  • Obviously, any of these numbers can be tailored to your specific state.

How do you respond to common arguments against fair share legislation?

  • "Businesses can't afford to provide health insurance."
    Most businesses provide decent health benefits to their employees and have done so for decades, so they face no increased costs from fair share legislation. In fact, the real economic burden that most businesses face is competing against the minority of firms that don't provide health care and unfairly dump their health care costs on the taxpayers.
  • "It unfairly targets just a few companies."
    Many laws require greater social responsibility from larger firms than smaller firms, especially large firms like Wal-Mart that have received hundreds of millions in tax subsidies from government. Also, large employers have the market power to set standards in their industries, so if those dominant firms don't provide health care to their employees, they essentially force smaller firms to drop health care coverage or face economic destruction by irresponsible larger competitors.
  • "It will cost jobs."
    There is no evidence that requiring minimum health benefits -- similar to existing requirements to pay a minimum wage -- has any effect on employment levels. Most businesses, particularly retail and service firms, locate in a particular state to be close to consumers or for a range of reasons independent of such wage or benefit requirements. Despite threats before passage of the Maryland law, Wal-Mart is building a new distribution center in the state. To the extent that there are such job concerns in particular industry sectors, a bill can be crafted to exempt some businesses; the New York State bill exempts manufacturing firms, firms which are thought to be more sensitive to cost differentials because they often serve a global market.

Quotes in Support of Fair Share Legislation

  • "When Wal-Mart enters a market, traditional businesses shrink or fade away entirely. By that I mean those businesses that provide their employees with more than just an hourly wage... businesses that provide health care and other benefits. Employee benefits and fair competition leave town when Wal-Mart moves in."
    - John Catsimatidis, Chairman & CEO, Red Apple Group/Gristedes Markets in New York City

  • "In other words, for each firm that will be obliged to pay its fair share for health insurance under the [Massachusetts] House bill, there will be more than 18 firms that have the potential to see their costs reduced. Not only is this reform good for businesses, it is good for the Massachusetts economy as a whole. The increased spending on health care from establishing near-universal coverage will trigger a net $400 million increase in the commonwealth's GDP. This growth will create approximately 8,000 new jobs and new opportunities for Massachusetts businesses."
    - Barbara Berke, former director of the Massachusetts Department of Business & Technology

  • "As small business owners, we pay our fair share for our employees' health care. In most cases, we have not received government support to start our operations or maintain them. Moreover, we carry our weight, we pay our taxes, and we contribute back to our local host communities."
    - Robert Dickerson, owner of Work Printing & Graphics in Baltimore

More Resources


Some Key Research Studies