This spring, Chevron workers testified that the company canceled health coverage for hundreds of members of United Steelworkers Local 5 at its Richmond, California refinery, during a strike that ultimately lasted two months. Thousands of nurses at Stanford Health Care were told in April they would lose their health insurance if they did not return to work during their week-long strike. More than 300 employees at Redwood City’s Sequoia Hospital received a similar message after going on strike in mid-July as contract negotiations stalled.
Discontinuing health insurance benefits is a common tactic in labor disputes because without them, workers can be more easily persuaded to capitulate to management’s demands. But California lawmakers are giving the strikers an edge.
Assembly member Jim Wood, a Democrat, is hoping that a new California law he authored would allow private-industry employees to maximize state subsidies for coverage purchased through the state’s health insurance marketplace, Covered California. would prevent employers from cutting health benefits during labor disputes. The bill, which takes effect in July, was sponsored by the California Labor Federation, the California Teamsters Public Affairs Council and the Los Angeles County Federation of Labor.
“The goal of the law is to say, ‘No, you can’t do that,'” Wood said. “Never try it again.”
According to Kelly Green, a spokeswoman for Covered California, premiums for eligible employees will be covered as if their income was just above the Medicaid eligibility level. The state will factor in the employee’s federal subsidy and cover the difference. For example, a single person earning $54,360 a year can afford to pay 8.5% of their income, or about $385 a month, in premiums under a mid-level health plan. Under the new law for striking workers, someone choosing the same plan would pay nothing in premiums – as if that person earned $20,385 per year for the duration of the strike.
The federal government authorized an increased subsidy under the American Rescue Plan Act. The enhanced subsidy under the Inflation Reduction Act will continue till 2025. The state’s share of the subsidy could increase after the federal stimulus expires.
An estimate the unions shared with the state suggested it would cost California an average of $341 per worker per month – with strikes lasting one to two months. Labor groups estimate the bill would affect fewer than 5,000 workers a year. There are about 15 million workers in the private sector in California, and strikes are generally a tool of last resort in labor negotiations.
It’s unclear how businesses will respond. Chevron, Stanford Health Care, and Dignity Health, the operator of Sequoia Hospital, did not respond to requests for comment. The bill received no formal opposition from businesses or taxpayers’ groups. California’s subsidies covered as part of the Affordable Care Act run from a mix of federal and state funds, so there’s no direct cost to businesses.
Last year, Gov. Gavin Newsom, a Democrat, signed the Public Employees Health Protection Act, which prevents public employers from terminating health coverage during an authorized strike. The new law for private industry is different: There are no restrictions on the cancellation of health benefits during strikes – or financial penalties.
Nationally, Democrats in the House and Senate have pushed for an outright ban on the practice, but no bills have made it out of committee.
When California workers lose their employer-sponsored health benefits, they may be eligible for the state’s Medicaid program, known as Medi-Cal, or to purchase health insurance through Covered California. may be eligible for. With the latter option, employees can receive a variety of subsidies to help pay their monthly premiums. Generally, the lower a household’s income, the higher the subsidy.
Proponents point out that even when employees qualify for Covered California, that insurance can be much more expensive than plans through their jobs — sometimes consuming 30% to 40% of their income. Is. And striking workers may experience a delay because coverage may not go into effect until the next month.
“It’s one of the drawbacks of having a health care system that is tied to employment,” said Laurel Lucia, health care program director at the University of California-Berkeley Labor Center. “We saw during the pandemic that when furloughs or layoffs occurred, people lost job-based coverage when they needed it most.”
Striking Sequoia workers reached an agreement with Dignity Health and returned to the 208-bed facility before the health coverage was cut off on August 1, but some said they would have held the picket line if it had not been for fear of losing their benefits. But would have stayed longer.
“It was very scary,” said Mel Rosiles, a certified nursing assistant and member of the union’s bargaining team who was pregnant at the time. “Most of our employees felt threatened by this move by our employer to take away our family’s health insurance if we did not return to work.”
The California Association of Health Plans raised concerns over an early version of the bill that sought to establish a category for striking workers, but the industry group dropped its opposition when it determined that Covered California could make the change without it. can control.
Covered California estimates that it will cost approximately $1.4 million to roll out this benefit. The agency said it will create application questions to screen eligible workers and remind them to discontinue coverage once they return to work.
KHN (Kaiser Health News) is a national newsroom that does in-depth journalism about health issues. Along with policy analysis and polling, KNN is one of the three major operational programs in KFF (Kaiser Family Foundation). KFF is a thriving non-profit organization that provides information on health issues to the nation.
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