Capital Accounts is an occasional chronicle of the intersection of politics and legal policy in Sacramento.
Patricia Butler, a Colorado-based health care consultant, is working both with the Democrats and the governor’s office, according to Sumi Sousa, Nunez’s health care policy adviser.
The governor has retained the Los Angeles firm of Reish Luftman Reicher & Cohen and is working with three attorneys from the employee benefits practice, according to a spokeswoman for his office.
The focus of all the lawyers is ERISA, the Employee Retirement Income Security Act. The 1974 law bars states from regulating employer-provided health plans. Designed to allow large corporations to offer similar benefits to employees in different states, the law has stymied states’ attempts to create universal health care.
California’s leaders, like those in other states, are pondering so-called play-or-pay plans that would require employers to offer health care coverage or pay into a state pool that would insure workers. Business interests have already said they may bring an ERISA suit against any play-or-pay scheme. But both Butler and Borzi, who did not return phone calls seeking comment, have said in various journal articles that federal courts may uphold laws that target a broad range of businesses � not just the big ones � without dictating the quality of health coverage they must provide.
Mark Johnson, a Texas attorney and ERISA business consultant, generally agreed.
Stressing the caveat, he said, “If a company already has a benefit plan covered by ERISA, any attempt to tell that company what it has to offer is just not going to fly.”
The legal questions go beyond ERISA. Any law that emerges from Sacramento is likely to face a host of legal challenges. Right now Democrats are planning to push any policy changes through the Legislature and then place a funding mechanism before voters next year. But concerns have already been raised that stuffing the complex issue into one initiative may violate the Constitution’s single-subject rule, which requires ballot measures to address just one proposed action. The Legislature could enact a new levy on businesses, but that requires a two-thirds vote and Republicans have already said they won’t support a tax hike.
Even typical Democratic allies may pose a challenge. Consumer activists, most vocally Foundation for Taxpayer and Consumer Rights founder Harvey Rosenfield, have already vowed to fight any mandate requiring the purchase of insurance without giving the state more control over policy costs and coverage.
“It’s unprecedented as a legal issue to force people to buy a product that’s unregulated,” said Jamie Court, president of FTCR. “It’s taxation without representation.”
And that’s just the legal battle over whatever legislation comes out of the Capitol. The real billable hours may start adding up for lawyers like Leacox when state regulators try to enact the new rules and companies have to figure out how to comply.
“The implementation and the practice,” Leacox said. “That will be a full-time employment act.”
