California bill would fine big firms whose workers get Medi-Cal

Proponents say it would eliminate a loophole in the Affordable Care Act that encourages employers to dump hourly workers onto the government dole. Opponents call it a job killer.

By Chad Terhune, Los Angeles Times
7:27 PM PDT, May 31, 2013

For years, politicians and labor unions have pilloried Wal-Mart and other large employers for paying workers so little that many qualify for government health insurance at taxpayers' expense.

Now critics fear the public will get stuck with an even bigger tab as California and other states expand Medicaid as part of the federal healthcare law. That has California lawmakers taking aim at the world's largest retailer and other big firms.

Legislators, backed by unions, consumer groups and doctors, are calling for fines that could reach about $6,000 per full-time employee who ends up on Medi-Cal, the state Medicaid program for the poor and others. They say this would eliminate a loophole in the Affordable Care Act that encourages large retailers and restaurant chains to dump hourly workers onto the government dole because there's currently no penalty for doing so.

The outcome of this California battle could have national implications as other cash-strapped states search for ways to shore up safety-net programs that are bound to be stretched by a massive healthcare expansion.

(More here.)