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Bills Seek to Expand Health Insurance, Workers' Rights

September 02, 1998|VICKY TORRES

Among the jumble of bills state legislators passed in their haste to meet the end-of-session deadline Monday are a few that affect small business.

These bills are now headed to Gov. Pete Wilson, who has until Sept. 30 to sign or veto them. Some are already on his hit list. Small-business activists hope that last-minute lobbying might change his mind on a couple.

Here's a look at some of the measures:

* Mental health coverage: AB 1100, introduced by Rep. Helen Thomson (D-Davis), requires medical plans, managed-care providers and disability insurers to provide the same coverage for severe mental illnesses as they do for other illnesses, starting July 1, 1999.

Covered would be schizophrenia, schizo-affective disorder, bipolar disorder (manic-depressive illness), major depression, panic disorder and obsessive-compulsive disorder. A 30-day annual limit on services would be imposed.

The National Federation of Independent Business opposed the measure, saying it would increase health-care costs by up to 10% and erode the ability of small businesses to provide basic health care for their employees. But studies by the Rand Corp. and the National Institute of Mental Health showed that in the 19 other states with similar requirements, premiums did not increase, according to Nancy Chavez, a legislative consultant in Thomson's office.

The California Chamber of Commerce initially opposed the measure, but after polling members discovered that 65% favored extending coverage. Wilson's position is not clear.

* Small-business health coverage: Two bills introduced by Sen. Herschel Rosenthal (D-Los Angeles) would expand the definition of the small-group insurance market and allow health-insurance pools to include more small businesses. Currently, health-care providers and the state's own program, the Health Insurance Pool of California, can enroll only businesses with two to 50 employees.

SB 593 would extend the small-group definition to include one person, which would enable the self-employed to get insurance, and SB 393 would expand that definition to 51 through 100 employees. The first measure is supported by the NFIB, but it objects to extending coverage to mid-size businesses, which it contends don't have a problem getting insurance.

Blue Cross opposes expanding the small-group market to the self-employed, fearing that high-risk individuals who can't get insurance under other means will simply call themselves a business owner and enroll in a pool.

But the arguments may be moot because the outlook is not promising for Wilson to sign either measure.

A bill that recently did get the governor's signature was SB 1790, again by Rosenthal, which allows small businesses with two to 50 employees to provide health insurance to their employees working 20 to 29 hours a week. Under the current small-group insurance market rules, only employees working 30 or more hours were eligible for health insurance. Rosenthal believes the change in hours will enable restaurant workers to get coverage.

* Arbitration agreements: Under AB 574, by Speaker Antonio Villaraigosa (D-Los Angeles), companies would be prohibited from requiring new employees to give up their right to a jury trial in work disputes and instead use binding arbitration. Employers who violate the law and require employees to sign such agreements as a condition of employment could be fined $5,000.

Opponents include the NFIB and the California Chamber of Commerce. Meanwhile, Wilson is not likely to be persuaded by the supporters--trial lawyers--who argue that a variety of industries use the agreements to forestall sexual harassment and other lawsuits.

* Alameda Corridor planning: A relatively innocuous bill, SB 1742, by Sen. Betty Karnette (D-Long Beach), would require the state Trade and Commerce Agency to work with community organizations to develop a plan to spur economic development along the Alameda Corridor. Local industry clusters would be identified and assessed, and business incubators and small-business networks fostered.

But the TCA is opposed to such a plan, saying it would duplicate its own effort. The agency persuaded Wilson to veto two weeks ago another planning measure, AB 901, introduced by Rep. Grace Napolitano (D-Norwalk). AB 901 would have required the California State World Trade Commission to prepare a statewide strategic plan for international trade. But the TCA again said its own reports provide adequate information.

* Home-based businesses: Finally, the Legislature delayed action on two bills that would have affected home-based business owners.

AB 1063, by Rep. Wally Knox (D-Los Angeles), would have allowed the state Franchise Tax Board to provide charter cities (94 of the state's more than 300 cities) with personal income tax information that would enable the cities to track down home-based business owners who aren't paying city taxes.

A related measure, AB 2065, sponsored by Rep. Tony Cardenas (D-Sylmar), would have exempted home-based writers, musicians and creative artists from paying city business taxes.

Both were sent to the state Senate's Revenue and Taxation Committee and were slated for hearings later in the year. The measures could be revived when the new state Legislature begins work in December and January.

With 26 departing legislators, by next year small-business activists may have found candidates more willing to act on their concerns.


Times staff writer Vicki Torres can be reached at (213) 237-6553 or at

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