OFFICIAL TITLE AND SUMMARY
Prepared by the Attorney General

Proposition 72

Health Care Coverage Requirements.
Referendum.

• Provides for individual and dependent health care coverage for employees, as specified, working for large and medium employers;
• Requires that employers pay at least 80% of coverage cost; maximum 20% employee contribution;
• Requires employers to pay for health coverage or pay fee to medical insurance board that purchases primarily private health coverage;
• Applies to employers with 200 or more employees beginning 1/1/06;
• Applies to employers with 50 to 199 employees beginning 1/1/07. Applies to employers with 20 to 49 employees if tax credit enacted.

Summary of Legislative Analyst's Estimate of Net State and Local Government Fiscal Impact:

• Expenditures fully offset by fee revenues paid mainly by employers, which could range from tens of millions to hundreds of millions of dollars annually, to fund a new state program primarily to purchase private health insurance coverage.
• Reduction in county health program costs potentially in the low hundreds of millions of dollars annually.
• Uncertain net fiscal impact on state-supported health programs.
• Increased costs potentially in the low hundreds of millions of dollars annually for state and local public agencies to provide additional health coverage for their employees.
• Net reduction in state tax revenues potentially in the low hundreds of millions of dollars.
• In summary, unknown net savings or costs to state and local government.