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California Considers 'Fair-Share' Insurance Initiative

California Governor Arnold Schwarzenegger is forging ahead with a universal health care initiative that opponents contend is a ticking legal time bomb. He unveiled a package of proposals Jan. 8 aimed at securing health care for 4 million uninsured Californians.

The proposal places some of the burden of funding that health care on employers with 10 or more employees that do not already offer health insurance to their workers. Those companies, estimated to be 7.5 percent of businesses employing 5.7 percent of California workers, would be required to pay the equivalent of 4 percent of their payroll into a state fund--an estimated annual contribution of about $1 billion.

"Were we to approve Maryland's enactment solely for its noble purpose, we would be leading a charge against the foundational policy of ERISA, and surely other states and local governments would follow," the majority wrote. "This is precisely the regulatory balkanization that Congress sought to avoid by enacting ERISA's preemption provision."

ERISA experts tend to agree. "It's hard to conclude that Congress intended for ERISA to be the subject of multiple tax regimes across 50 states to support publicly financed health care," says Roy Harmon III, principal with Harmon & Major in Greenville, S.C.

staff Writer

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