NU Online News Service, Oct. 6, 2003, 1:13 p.m. EDT – California Gov. Gray Davis, a Democrat, has signed S.B. 2, a bill that is supposed to create a “universal health” coverage system in California.

If the bill takes effect as written, California employers with at least 200 employees will have to provide family health coverage for eligible employees starting in 2006.

Employers with 50 to 199 workers would have to provide worker-only coverage starting in 2007. Employers with 20 to 49 workers would have to provide worker-only coverage in 2007 if the state offers subsidized coverage.

Affected employers that did not provide health coverage would have to pay a health coverage fee. The California Managed Risk Medical Insurance Board would then buy coverage for eligible workers.

The bill would not affect employers with fewer than 20 employees, and it would not limit the cost of health coverage or medical services.

The California Medical Association, Sacramento, Calif., helped write the bill, and a variety of consumer groups and labor groups support it. Some California employers argue that letting big employers get away with not providing health benefits hurts competitors that do provide benefits.

But most California employer groups, Arnold Schwarzenegger, the Health Insurance Association of America, Washington, and the National Association of Insurance and Financial Advisors-California, Sacramento, oppose the bill and say it will cost state employers and workers billions of dollars a year in extra premium costs, lost jobs and wage cuts.

The opponents are hoping they will be able to block the bill by organizing a referendum against the bill and filing suits based on the federal Employee Retirement Income Security Act, a law that prohibits states from regulating employee benefits.