Business Groups Speak in Opposition to AB 880


Weston LaBar of the Redondo Chamber of Commerce is joined by other area business leaders in vocally opposing AB 880. Photo by Brian Addison.

A coalition of Californian business groups hosted by the Long Beach Area Chamber of Commerce came out Tuesday morning against AB 880, a pending piece of legislation that addresses a possible financial loophole within the Affordable Care Act (ACA).

Advocates of the bill introduced by Assembly Member Jimmy Gomez say the bill seeks to impose fines on businesses with 500 or more employees that use what the California Labor Federation dubbed the “Wal-Mart Loophole” to avoid paying healthcare benefits. In short, AB 880 supporters believe that large corporations will reduce employees’ hours to avoid having to keep them on the corporation’s healthcare plan, thereby diverting the employees to state-funded MediCal.

However, opposition, including those who gathered at the Chamber Tuesday, did not mince their words, repeatedly referring to the piece of legislation as crippling, destructive and confusing, particularly as it comes so quickly on the heels of the massively complex ACA.

“[AB 880 is a] ridiculous piece of legislation,” said Tracy Rafter of the Los Angeles County Business Federation. “[While] we are looking to implement all the ACA regulations, this is not the time to add additional regulation and legislation… For employers to be at another law, another regulation when we haven’t even begun figuring out the ACA, the timing is just bad.”

{loadposition latestnews}Challengers of the bill claim that the effect of the legislation would be what Long Beach Area Chamber President and CEO Randy Gordon called a “double tax” that will have a “chilling effect on our economy.”

“California’s future depends on the fiscal and [physical] health of its residents, and it would be unwise to further one at the expense of the other,” Gordon said. “AB 880 is essentially a double tax on employers who already pay taxes that help fund MediCal… 880 would mandate a costly new governmental program on top of ACA, forcing severe financial penalties on employers who employ part-time or seasonal workers.”

The ultimate fear is that major industries–such as trucking, agriculture and construction–that rely on temporary or seasonal workers will refrain from hiring since, according to the opposition, the bill penalizes employers who offer healthcare even if an employee opts for MediCal.

“[AB 880] should be called the ‘Work-to-Welfare Act,'” said Brian Rosario of the Torrance Chamber of Commerce. “Because that’s what it does: it puts people out of work.”

According to Weston LaBar of the Redondo Chamber of Commerce, the hundreds of businesses and organizations–including the Alliance for a Healthy California, the California Chamber of Commerce, the Hispanic Chamber of Commerce and the National Retail Federation, among others–are continually reaching out to those in Sacramento to help defeat the legislation.

Eds. note: Weston LaBar is a Long Beach Post contributor.

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