Senate Labor Panel Approves Minimum Health Care Benefits Rate

TRENTON – The Senate Labor Committee today passed legislation sponsored by Senators Stephen Sweeney, Joseph Vitale, and Joseph Coniglio that would set a minimum health benefits rate for businesses with more than 1,000 employees in New Jersey.

“New Jersey can no longer afford to provide health care for individuals whose employers refuse to provide even a minimum amount of health benefits,” said Senator Sweeney, D Gloucester, Cumberland, and Salem and chair of the Committee. “Over half of New Jersey’s one million uninsured individuals either work or have a family member who works, yet are not provided with health benefits. It’s time for large employers to meet their responsibilities and provide health care benefits.”

The bill, S-447, would set a minimum benefits rate of $1.65 per hour for individuals working at least 13 hours a week for a company employing 1,000 or more individuals in New Jersey. The rate would increase to $2.50 during calendar year 2008 and $3.30 during calendar year 2009 with annual increases in 2010 and beyond based on the medical component of the Consumer Price Index for All Urban Consumers, as reported by the US Department of Labor.

“Large corporations who fail to provide health care are putting an undue burden upon the State’s health care safety net,” added Senator Vitale, D-Middlesex. “Programs like FamilyCare were designed to provide for the most needy and vulnerable in New Jersey. They weren’t meant to act as a corporate subsidy for companies putting profits over their employees.”

“Companies like Wal-Mart have now become infamous for denying a large majority of their thousands of workers any health benefits, relying on government-based health insurance programs to provide these benefits and padding their profits as the expense of taxpayers,” said Senator Coniglio, D- Bergen. “In fact, Wal-Mart now instructs its employees on how to apply for government health care benefits. This is absurd and other large employers are following suit, swelling the ranks of the uninsured and shifting the burden to state governments.”

If an employer chooses to spend less than the benefit rate set forth by this act for any employee, then the employer will pay to the NJ Department of the Treasury an amount equal to the difference between the actual health care expenditure paid to the employee and the required rate. These funds would be placed in the newly created Expanding Access to Health Care Fund. The Fund would be used to help finance health care coverage for uninsured and underinsured workers and their families.

The benefit requirements of the bill would apply to all public and private employees including those covered by a collective bargaining agreement. Under the bill, the definition of employee does not include independent contractors, realtors, high school students or any part time employee enrolled in college part or full time.

The bill would allow the Department of Labor and Workforce Development to investigate any possible violations of this bill. The fine for non-compliance would be not more than $100 for each day the violation occurred. The bill would also allow any individual or any entity to bring civil action against any employer who violates the provisions of this act. The employer shall be liable for any violations of this bill by its subcontractors.

The Committee approved the bill by a vote of 3-1.

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