Employer Healthcare Mandates Struck Down By Inconvenient Facts (UPDATE)

San Francisco’s mandated levy on employers to fund a universal healthcare scheme has been struck down by federal district judge Jeffrey White. Such a fee upon employers violates the 1974 ERISA law which ensures employer choice as to whether and how to provide healthcare benefits.

San Diego Union-Tribune editorial writer Chris Reed has been sounding the tocsin non-stop, and virtually alone among California’s press, that California’s proposed $14+ billion scheme for universal healthcare would stumble over this same inconvenient fact: ERISA forbids such employer mandates. As Reed pointed out December 12:

After nearly a year of searching, I've yet to find a single legal decision from any court in America that even hints that proposals before the Legislature to force California employers to either provide health insurance or pay an in-lieu fee are legal. I've asked the staffs of the governor and the Assembly speaker, the biggest advocates of an employer mandate, to provide such an opinion. All I've gotten is pabulum about their "confidence" that their proposals would stand up in court -- hollow words that ignore the fact that the 1974 federal law known as ERISA has a 33-year winning streak in blocking local or state laws mandating that employers provide health coverage.

Instead of noting the incongruity of pursuing a plainly illegal law, the media have written hundreds of thousands of words about the health reform debate with scarcely any mention of ERISA at all. Even new court rulings with precise parallels to what's going on in California are ignored….

One thing I won't get my hopes up for, however, is for California's political journalists to ever admit their complicity in the massive waste of time we've witnessed over the past year. We've been having a gigantic struggle over ambitious health reform proposals, a battle played out on many fronts. But 99.9 percent of the time, reporters covering the fight couldn't be bothered to contemplate the vast, uncontradicted evidence suggesting the proposals were plainly illegal under federal law.

This isn't just lazy and irresponsible journalism. It's downright strange. [Emphasis added]

Indeed, strange, and that’s a polite way of saying the media has been more than lazy but complicit in trying to further universal healthcare schemes despite both legal facts and the many shortcomings of such schemes.

As Reed takes the Los Angeles Times to task:

The Times editorial is also notable for its silence on how the bill was put together. Normally LAT edit writers do a great job pounding away on secretive government, back-room deals, etc. But in 531 words, the edit didn't mention the bribes to unions to win over Assembly Democrats; the fact that no hearing was ever held on the federal law that is a gigantic obstacle to a state employer mandate; the fact that no hearing was ever held on the problems posed by the bill giving employers a huge incentive to drop coverage in favor of a state plan; etc.

I think the edit amounts to one more sign that the LAT believes anything is better than the status quo. It's not.

I wrote about California's healthcare scheme payola here.

The Massachusetts scheme of employer mandated fees has, so far, not stumbled over ERISA because the penalty is so small that no one has yet taken it to court. As Massachusetts’ plan expands, as such plans must in order to meet additional inconvenient facts of funding when medical costs rise and more individual and business freeloaders shift their responsibilities onto taxpayers, that court challenge will come.

Until then, look for Democrats and media to continue to further each’s agenda of government-run healthcare, the health care, fiscal, and legal inconvenient facts be damned.

UPDATE: ERISA Rules Again

The Equal Employment Opportunity Commission is relying upon ERISA and upon common-sense in ruling that employers can coordinate retiree benefits with Medicare, to reduce the burdensome costs of voluntary healthcare benefits provided by employers that are already provided by the government.

The New York Times reports:

The policy, set forth in a new regulation, allows employers to establish two classes of retirees, with more comprehensive benefits for those under 65 and more limited benefits — or none at all — for those older…. Naomi C. Earp, the commission’s chairwoman, said, “This rule will help employers continue to voluntarily provide and maintain these critically important health benefits.”… In general, the commission observed, employers are not required by federal law to provide health benefits to either active or retired workers….

The ruling is supported by large employers and by large unions (who have taken on more healthcare benefits burdens, for example, via the auto workers agreements).

James A. Klein, president of the American Benefits Council, a lobby for large employers, said: “The new rule is a victory for common sense and for retirees. Retiree health coverage has been declining for many years. Without this rule, many more retirees, especially early retirees, could find themselves without employer-sponsored coverage.”

Gerald M. Shea, assistant to the president of the A.F.L.-C.I.O., also saw merit in the new rule.

“Given the enormous cost pressures on employer-sponsored health benefits,” Mr. Shea said, “we support the flexibility reflected in the rule as a way to maximize our ability to maintain comprehensive coverage for active and retired workers.”

Of course, the nutroots are in alarm. See Memeorandum for a sample of their uninformed opinions. One (actually a part of one), by John Cole, however, does strike home. Cole calls it, “Privatize the Profits, Socialize the Costs”:

This is just another piece of evidence to me that we will be moving to single-payer in the next deade or so, simply because big business wants this (and would argue they need it) in order to survive. And we will end up dragging Red State and NRO along as they scream “socialized medicine” the whole way. At this point, it almost has a feel of inevitability about it.

Indeed, large companies and giant insurers have sought to shift their costs of healthcare onto taxpayers. In 1994, the largest insurers initially signed on to Hillarycare, to shift claims liabilities onto taxpayers while they kept the lucrative claims processing contracts, until smaller insurers and insurance brokers exposed the inanity of Hillarycare and the giant insurers reversed course. More recently, giant employers have been seeking, similarly, to shift their healthcare costs onto taxpayers. I wrote about it here in the Examiner and here.

Red Staters beware. Healthcare consumers beware. Taxpayers beware.

This is a direct example of how, once a government healthcare program is set up, employers and individuals will take advantage of it to shift their costs onto others, and leave patients at the mercy of government bureaucrats.