New Health Insurance Law Faces Showdown

Gray Davis signed a law before he left office as Gov of California--replaced by the Terminator in a controversial recall election--called SB-2. Among other things, SB-2 requires all businesses with 50 or more employees to offer them health insurance. California businesses promptly started a referendum to undo it.

By Marc Lifsher, LA Times Staff Writer

SACRAMENTO — The November ballot battle over California's controversial new law on employer-provided health insurance is shaping up to be both noisy and expensive.

The law, known as SB 2 and signed in the waning days of Gov. Gray Davis' abbreviated term, is facing a recall of its own. A business-backed referendum on the Nov. 2 ballot could wipe the law off the books.

The contest officially kicks off today when a coalition that includes labor unions, doctors, nurses, church groups and retirees launches its defense of the 2003 law. Among other provisions, SB 2 will eventually require businesses with 50 or more employees to provide health insurance for their workers.

The pro-SB 2 campaign plans to play on the insecurity of California voters who worry about paying an ever larger share of their employer-provided health insurance or losing their coverage altogether.

For example, proponents of the law plan to focus on its less publicized provisions, which ban employers from dropping current health insurance plans and limit workers' share of health insurance premiums to 20%.

At the same time, the "Yes on SB 2" campaign will soft-pedal the law's mandatory-insurance provision, which has been a lightning rod for opponents.

And that's exactly where business groups, which won't officially launch their anti-SB 2 campaign until summer, see a soft spot. Employers argue that the law is a job killer that will raise their costs, lead to higher taxes and insert government meddling and bureaucracy into the healthcare market.

(To read the rest, click the title)