Oregon AFL-CIO backs ballot measure to make big employers pay for health care
SALEM — The Oregon AFL-CIO filed a ballot initiative Jan. 27 that would require Oregon employers with more than 4,500 workers to spend at least 9 percent of their payroll on employee health insurance.

The Fair Share Health Care initiative is modeled after a bill that passed the Maryland Legislature last month. Maryland is the first state to require large corporations to provide health care for their employees. A similar bill has been introduced in the Washington Legislature. Oregon and Washington are among nearly 40 states using the labor-backed Maryland legislation as a model to enact legislation or pass voter initiatives.

“It’s irresponsible and costly when nonunion businesses boost their profits by denying health care to their employees and then let taxpayers pick up the slack,” said Oregon AFL-CIO President Tom Chamberlain. “The Oregon AFL-CIO filed this initiative to force large profitable employers to pay their share toward a healthy workforce and healthy Oregon economy.”

Once given clearance for a ballot title, the state labor federation will begin collecting the more than 100,000 signatures needed to qualify for the November ballot.

“The Oregon AFL-CIO has a history of successfully putting initiatives on the ballot,” said Jennifer Sargent, public relations/ research director for the state labor federation. “We have the internal program in place to do that, and we’re seeing a big response from the community for support.”

The initiative already has the backing of three of the state’s largest labor organizations: the 30,000-member Service Employees International Union Local 503, the 25,000-member Oregon Council 75 of the American Federation of State, County and Municipal Employees, and the 18,000-member United Food and Commercial Workers Local 555. Locals 555 and 503 are affiliated with the new Change to Win labor federation.

If passed, the Fair Share Health Care initiative would apply to 12 Oregon employers, including Wal-Mart, Oregon Health & Science University, Providence Health System, Legacy Health System, Kaiser Permanente, Intel, Nike, Safeway Inc., Albertsons Inc. and Kroger Co.’s Fred Meyer Stores.

Most of those employers already provide health insurance for their employees, with one glaring exception: Wal-Mart, which employs more than 11,000 workers.

The State of Oregon doesn’t keep tabs on how many employees of private companies receive taxpayer-financed medical insurance, but other states do. And Wal-Mart is the leader in virtually every state.

In Washington, for example, more than 3,100 Wal-Mart employees were benefiting from state-subsidized health coverage in 2004. The cost to taxpayers: $9.25 million. (See related article on Page 3.)

“It’s not fair that responsible employers play by the rules while some companies shift their health care costs to other employers or the taxpayer,” said Gene Pronovost, president of Local 555 and a co-sponsor of the Fair Share initiative. “UFCW supports initiatives that correct these abuses.”

Washington State’s Fair Share Health Care bill would require companies of 5,000 employees or more to spend 9 percent of payroll on employee health care. The bill passed out of the House Commerce and Labor Committee last month. The new Maryland law (the Legislature overrode a veto by Republican Gov. Robert Ehrlich) requires any private employer with more than 10,000 employees in the state to spend at least 8 percent of its payroll for workers’ health care.

Chamberlain said that by requiring large corporations to report what they are spending on health care for their employees and requiring them to pay their fair share, a Fair Share Health Care Act in Oregon would:

  • Reduce the bill Oregon taxpayers pay to cover profitable employers’ labor costs;
  • Help alleviate the financial pressures facing Oregon as it struggles to meet a growing need for Medicaid; and
  • Level the playing field between companies providing good jobs and benefits to their workers and those that don’t.“Most of our state’s largest employers pay well over the 9 percent (of payroll) threshold for health insurance,” Sargent said. “I think people are fed up with Wal-Mart freeloading off the Oregon Health Plan.”

“There are large employers out there doing a good job, such as Fred Meyer, Safeway and Albertson’s,” said Chamberlain. “A company like Wal-Mart that doesn’t provide health care coverage has an unfair advantage over those companies.”

Some health policy experts say the proposal would do little to extend health coverage to the 66,000 uninsured Oregonians.

If approved by voters, the initiative might lose a legal challenge because federal courts have sharply limited the rights of states to regulate health benefits and rates, experts say.Wal-Mart opposes plan

Wal-Mart said it does offer health coverage to some of its workers and their families, although critics have said the company’s relatively low wages mean many employees can’t afford the coverage.

Wal-Mart spokeswoman Amy Hill said Friday that the proposal would be counterproductive.

“Employer mandates like these, whether introduced as legislation or by initiative, do absolutely nothing to help working families,” she said. “They do nothing to control the costs of soaring health care. They slow economic growth. It is simply politics, not policy.”

According to a survey released last month by The Kaiser Family Foundation, nearly all employers with 200 or more workers nationwide offer some form of health benefits. However, the proportion of small firms offering health insurance has declined from 68 percent in 2000 to 59 percent last year.

Most large employers also spend more on health care than the union proposal would require.

According to a survey by Mercer Human Resource Consulting, employers with more than 500 workers spent an average of 14.8 percent of payroll on health benefits.

Federal courts in the 1980s ruled that the U.S. Employee Retirement Income Security Act prohibits states from regulating how self-insured companies provide health benefits. Many large employers self-insure, as Wal-Mart does, to avoid state regulation, said Paul Secunda, a law professor at the University of Mississippi.