State Employer Health Insurance Mandates: A Brief History

Publication Date: March 2004

Publisher: California HealthCare Foundation

Author(s): Thomas Oliver

Research Area: Health

Type: Brief

Coverage: California

Abstract:

Governor Gray Davis signed SB 2 in October 2003. This "pay or play" measure requires California employers to pay a fee to the state to provide health insurance unless the employer provides coverage directly. Participation requirements vary with firm size; the smallest firms are exempt. Under SB 2, an employer is entitled to a credit against the fee if it provides coverage to employees (and dependents, in the case of firms with 200 or more workers) that meets the minimum requirements of SB 2. Employer mandates have been incorporated into major health reform efforts in a number of states, but only one state (Hawaii) currently requires employers to offer health insurance to their workers. This report compares California's current SB 2 legislation with key mandate provisions in Hawaii and other states that have attempted to mandate employer-based coverage but encountered political and economic obstacles, including Massachusetts, Oregon, and Washington. Do past efforts hold the key to success for SB 2?