No Exemption for Non-Profits Under Proposition 72's $7 Billion Healthcare Coverage Mandate
Prop 72 takes money from California non-profit organizations and the people they serve. Prop 72 makes no distinction between private, public, for-profit and non-profit employers. Sloppily drafted and passed by the state legislature with no policy hearings and little public debate, Prop 72 is filled with rules that would create confusion and increased costs for non-profit organizations and their employees. Ambiguities and questions will be decided by an un-elected board with no accountability to voters. Here are some examples of how non-profit organizations could be affected by Prop 72:
- Prop 72 requires non-profit employers to pay 80 percent of the cost to cover many part-time workers.
Prop 72 requires employers to pay 80 percent of the cost of healthcare benefits for employees who work just 100 hours per month. Many non-profit groups operate on shoestring budgets and can't afford to cover part-time workers or pay 80 percent of the costs.
- Non-profits with more than 200 employees will be required to pay 80 percent of the cost to cover employees' dependents.
Prop 72 requires employers with 200 or more workers to pay 80 percent of the cost of dependent coverage. The Los Angeles County Economic Development Corporation estimates that this measure would cost employers with 200 or more employees $6,803 per employee per year. Smaller employers would pay $2,482 annually to cover each employee. The cost of Prop 72 will mean reduced services for those who depend on non-profit groups.
- Temporary employees must be covered.
Prop 72 mandates that employers must pay 80 percent of the costs to cover any eligible worker on the job for just three months. Many non-profit employers do not have the resources to provide health coverage to temporary or seasonal workers.
- Non-profits might be forced to cover workers after they leave the organization.
Prop 72 appears to base its coverage requirements on how many people are employed as of a date established by the board. Non-profits could be required to pay for a worker's healthcare coverage after he or she has left.
- Pay now. Refund later?
Confusing and conflicting provisions of Prop 72 might require employers to pay the healthcare tax and then apply to the state for a credit by proving that existing coverage meets the requirements established by the state board empowered to administer Prop 72. How many non-profit employers have the resources to pay twice for healthcare and then wait and hope the state refunds their money?
- Benefits and costs determined by a state board.
Prop 72 gives the state the power to determine what is covered by the state plan against which private coverage is measured. Non-profit employers that already provide coverage may discover their plans are not acceptable, and they could be forced to find other coverage or pay the state to cover workers through the state plan.
- Employers are responsible for worker payments.
If for any reason an employee does not pay their 20 percent share of the cost of coverage, the employer must pay. Employers are subject to a penalty of 200 percent of the payment for workers who, for any reason, do not pay their premiums.
- Workers can't refuse coverage.
Employees can't decide for themselves if they want, need or can afford the healthcare coverage mandated by Prop 72.
- Non-profits face huge penalties and expensive lawsuits.
Non-profit groups face lawsuits and substantial penalties if they are accused of reducing hours or taking other measures to avoid covering employees. They also face a 200 percent penalty if the premium is not paid to the state for "whatever" reason. There is no provision in the bill for employers to appeal any action taken against them by the state in disputes over payment.
- There are no cost-containment provisions in Prop 72.
Prop 72 includes no controls on healthcare costs. Additionally, taxpayers will get the bill for establishing the massive new bureaucracy that will be necessary to administer Prop 72.
Prop 72 takes money from California non-profit organizations and the people they serve! Join the campaign to defeat Prop 72.
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