Court rejects San Francisco insurance mandates

On December 27, 2007, in General, by Neil Stevens

Is the Governor’s plan next?

US District Judge Jeffrey White threw out part of a San Francisco law this afternoon, one that required employers to provide or pay for medical insurance for employers. White ruled that the federal Employee Retirement Income Security Act (ERISA) preempts and prohibits the states from imposing such requirements on employers.

Ordinarily I wouldn’t care, because San Francisco is such a freaky place, and if a conservative worried about every bad bill passed there, he’d never sleep. But this is important because Governor Schwarzenegger’s plan for all of California includes a similar requirement, and thus could also be illegal under ERISA.

To be honest, I’d never heard of ERISA before today. I have an opinion neither on whether it’s a good law or a bad law, nor whether the law is correctly interpreted here. Judge White was appointed by President Bush in 2002, for what it’s worth. He’s also the judge that put two San Francisco Chronicle reporters in jail for failing to reveal their source of Barry Bonds’ secret grand jury testimony. That all sounds good, so I’ll give him the benefit of the doubt and assume he’s right here in interpreting ERISA.

If he’s right, then AB1X, the Schwarzenegger/Democratic HillaryCare-lite bill that passed this month and will be debated in the Senate come January, could also be in trouble. Says the Chronicle:

The requirement that all employers either provide insurance for their workers or pay into a new state purchasing pool on a sliding scale of 1 percent to 6.5 percent of payroll based on company size is a key funding element of the plan and the one that may provide biggest obstacle to passage in light of White’s ruling, which San Francisco intends to appeal.

Not that AB1X is even guaranteed to get out of committee in the Senate:

But there are other issues that could spell trouble for the bill in a hearing set for Jan. 16 before the Senate’s health committee, which is chaired by Sen. Sheila Kuehl, D-Santa Monica, a longtime advocate of a single-payer health system that would eliminate private insurance.

….”There’s a lot to consider here,” Kuehl said. “I think you can assume that we will hold the world’s longest hearing because I want to have every bit of this bill looked at.”

So I’m still not worried about our state economy being trashed. Governor Schwarzenegger may be trying to do his best to link arms with Assembly Speaker Fabian Núñez (D-Los Angeles) to block job creation in this state, but Senate Democrats or the courts may yet save us from this monster we nominated and elected.


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