Bill would fine companies dodging healthcare costs

Bill would fine companies dodging healthcare costs

House Democrats Tuesday took another stand against big corporations that try to foist employee health care costs onto taxpayers.

But the bill’s proponents and Gov. John Hickenlooper say the measure is likely doomed in the Republican-controlled Senate. The Dems’ plan is to use the bill to show November voters Democrats care more about workers and taxpayers than the GOP.

The Corporate Responsibility Act, which was introduced Wednesday, would fine large corporations that don’t provide their employees with health insurance.

The bill would fine businesses with 250 or more employees for paying workers $12 an hour or less and not paying for health insurance. The fine would be between 25 cents and a dollar per hour per employee.

Democrats and other backers of the bill Tuesday said under current law taxpayers pony up roughly $50 million per year to cover the Medicaid costs for the working poor.

Take Rachelle Bainter, who has worked at a Denver-area McDonald’s for 27 years. After nearly 30 years of working for the fast food chain, the company gave her raise and now she makes a whopping $8.65 an hour — far under a livable wage of $10.79.

Bainter has high blood pressure and anemia. She’s on seven daily meds to take care of health issues which force her to go to the doctor several times a month.

Without Medicaid, Bainter says she would be either sick, homeless or dead.

After the implementation of the Affordable Care Act, many large corporations ended health insurance plans for their employees.

Some businesses killed plans because they didn’t qualify as basic health care or because the Affordable Care Act didn’t require businesses to pay for the insurance of employees who worked 30 hours or less per week.

To comply with the mandate that people sign up for health insurance, employees either went to Connect for Health Colorado to get health insurance, or if they qualified, onto Medicaid rolls. And those rolls grew – by a half-million adults and children between 2013 and 2015.

Around 770 companies in Colorado would qualify to be fined under the bill, according to the Colorado Fiscal Policy Institute.

Money collected, which would be counted as a Taxpayer’s Bill of Rights-exempt enterprise, would then go to cover Medicaid costs currently paid for by taxpayers.

To learn more about enterprises, read: What you need to know about Colorado’s biggest political battle.

Corporations that dodge paying health insurance have an unfair competitive advantage over responsible businesses that provide employee health insurance, said House Majority Leader Rep. Crisanta Duran of Denver.

The cost shift is unfair to employers who do the right thing for their employees, but it’s “also unfair to taxpayers because it means money that could have been available for schools, roads and colleges is instead subsidizing corporate profits,” according to a statement from the Colorado Fiscal Policy Institute.

A Tuesday news conference about the measure lacked any Republican sponsor from either the House or Senate. That suggests the bill will likely pass the Democratic-controlled House but faces a bleak future in the Republican-controlled state Senate.

Business groups are already lining up to oppose the measure.

Tony Gagliardi, executive director of the National Federation of Independent Businesses, which represents small businesses, called the bill a “backdoor attempt to raise the minimum wage.”

Gagliardi suggested that if Democrats want to pull people out of poverty, raising the minimum wage won’t do it. Instead, he said, “they should look at policies that empower people to have the necessary skills to get into and stay in the workforce. Bills like this create a divisive Legislature, a divisive lobby, and nothing is going to get done with this legislation.”

Hickenlooper waffled on his take on the measure. He called it a “message” bill for November voters and worried it would harm the state’s pro-business reputation.

He also said bills like the Corporate Responsibility Act tap into disgust with Wall Street and large corporations, “especially those that manipulate tax systems for their own benefit.”

Colorado should have high standards but still be pro-business, because it’s business that creates jobs, he said.

That may be true, but Tim Hoover of the Colorado Fiscal Policy Institute said on Tuesday that the greatest jobs growth in the past two years has been the low-wage jobs the bill intends to address.

And when pressed, the governor admitted that healthcare should be part of that high standard.

“We want to be a place that’s pro-business, but we take care of people,” he said.

Hickenlooper suggested that on sweeping bills such as the Corporate Responsibility Act, “It might make sense to go more slowly and analyze the pros and cons and how much benefit we get from this.”

The measure has another odd twist Dems refuse to address: The bill penalizes large businesses that pay their workers $12 an hour or less, not the $15 an hour that has been backed by a host of progressive organizations such as 9 to 5 Working Women and the Service Employees International Union in the highly publicized Fight for $15 that has won a minimum wage hike in New York and gained traction on the coasts.

The lower $12-an-hour ceiling contained in the Corporate Responsibility Act is the second major piece of legislation that Democrats have offered at the Capitol signalling the Party is backing away from the $15-an-hour movement.

Last year Democrats pushed for legislation that would ask voters to raise the state’s minimum wage, but for a maximum of $12.50 per hour, not $15, which has caused considerable grumblings between the progressive grassroots and the Party establishment.

The 2015 bill died in the House when it failed to get the two-thirds vote necessary to send it to the ballot. Proponents, however, haven’t given up: Seven citizen-driven initiatives are moving through the process of heading to the November ballot.

With 35 days left in the 2016 session, Democrats have yet to introduce a minimum-wage increase bill for $12 or $15 — a sign the Party may be avoiding the issue in an election year.

 

Photo credit: Steve Snodgrass, Creative Commons, Flickr

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About the Author

Marianne Goodland

has been a political journalist since 1998. She covered the state capitol for the Silver & Gold Record from 1998 to 2009 and for The Colorado Statesman in 2010-11 and 2013-14. Since 2010 she also has covered the General Assembly for newspapers in northeastern Colorado. She was recognized with awards from the Colorado Press Association for feature writing and informational graphics for her work with the Statesman in 2012.

1 Comment

  1. PCL on said:

    Did McDonalds give this woman high blood pressure and anemia? Did McDonalds cause the increase in health care costs from a few percent of the average paycheck in the 1950s to more than 20% today? The fact is that people in low wage jobs are were they are because their skills are not worth much; I know, I once had a minimum wage job. If the escalating bill for today’s extravagant health spending it tacked on to an $8.65 minimum wage, how many employers are going to continue to pay 9, 10, 12 or more dollars for employees who are a tough sell at 8? Some will have no choice, but those who can will automate, or hire illegals under the table, leaving large numbers of Americans permanently locked out of the ground floor of the labor market.

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