Taxpayers Shouldn’t Foot the Bill for Employers’ Health Care

by Mike Hall, Apr 21, 2006

A year ago, the idea that big companies like Wal-Mart should pay a “Fair Share” for their workers’ health care and stop dumping their employee health care obligations onto taxpayers was pretty much off the public’s radar.

But today, after a massive state-by-state mobilization by the AFL-CIO, its affiliated unions and others, health care and community groups saw Fair Share Health Care legislation introduced in more than 30 states. It’s an issue that the public embraces and that politicians know won’t go away—especially at election time.

It has even forced Wal-Mart to make some changes—cosmetic, though they may be—in employee health coverage.

The AFL-CIO Fair Share Health Care initiative would ensure the largest corporations—like Wal-Mart—stop shifting health care insurance costs onto workers, taxpayers and other businesses.

In January, the Maryland Legislature overrode Republican Gov. Robert Ehrlich’s veto of a Fair Share bill, the first such bill passed in the nation. In passing the Fair Share Health Care bill, Maryland became the first state to require its largest employers to spend 8 percent of their payroll on health care for their workers. Of the four employers in the state with more than 10,000 workers, only Wal-Mart does not meet the 8 percent threshold for employee health care. In May 2005, Ehrlich—with a top Wal-Mart executive by his side—vetoed the bill.

In general, Fair Share Health Care legislation requires large, profitable corporations to spend a certain percentage of their payroll to provide health care benefits for their employees or pay into a state health care fund. In March, the AFL-CIO released a new report on just how much Wal-Mart’s health care cost-shifting is costing states.

When workers can’t afford or are not eligible for their employer’s health insurance, families are forced to turn to taxpayer-funded programs such as Medicaid or the State Children’s Health Insurance Program, costing taxpayers some $21 billion a year, according to the Commonwealth Fund.

While most state legislatures wrapped up their 2006 sessions without approving Fair Share bills—last minute defections by some key lawmakers in Washington State and Colorado roadblocked legislation that appeared heading toward victory—legislative and community backers vow to be back.

In Washington State, Gov. Christine Gregoire (D) pledged to help “make it happen” in 2007 and an editorial in the Jackson (Miss.) The Clarion-Ledger urges “state lawmakers to adopt ‘fair share’ legislation in 2007.”

New York and New Jersey legislatures are still in session and Fair Share legislation could come to a vote before those sessions end later this spring. In Pennsylvania, the Legislature resumes work at the end of April and may hold hearings on Fair Share legislation introduced April 5.

“As the working families of Pennsylvania, we demand that these companies be held accountable. People need to know that there are companies right here in southwestern Pennsylvania, that are taking record profits, while their workers and their family members are being forced to go without the most basic health care coverage,” said Pennsylvania AFL-CIO President William George at the state federation’s Pittsburgh convention.

With the November elections approaching—and public support as high as 80 percent for rules that would force big corporations to provide health insurance for their workers or pay into a state health care fund—working family voters will hold their state lawmakers accountable for their support or opposition to Fair Share Health Care.

“There’s been a lot of good momentum to come out of the bill. And we’re going to keep building our momentum around it. We’re in this for the long haul,” says Beverly Brakeman, director of Citizens for Economic Opportunity, a Connecticut coalition of labor unions, community, faith-based and citizen action groups working for corporate responsibility and health care.

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