By Annie Sciacca | Kaiser Health News
This spring, Chevron workers testified that the company withdrew health insurance from hundreds of members of the United Steelworkers Local 5 at the Richmond refinery during a strike that eventually lasted two months.
Thousands of nurses at Stanford Health Care were told in April they would lose their health insurance if they didn’t return to work during their week-long strike.
More than 300 workers at Sequoia Hospital in Redwood City received a similar message after going on strike in mid-July as contract negotiations stalled.
Freezing health insurance benefits is a common tactic in a labor dispute because without it, workers might be more easily persuaded to give in to management’s demands. But California lawmakers are giving the strikers an advantage.
Assemblyman Jim Wood, a Democrat, hopes a new California law he is authoring will prevent employers from cutting health benefits during labor disputes by allowing private-sector workers to maximize government subsidies for coverage covering Covered California , the marketplace for state health insurance. The law, which goes into effect in July, was sponsored by the California Labor Federation, the California Teamsters Public Affairs Council and the Los Angeles County Federation of Labor.
“The goal of legislation is to say, ‘No, you can’t do that,'” Wood said. “Don’t ever try again.”
According to Covered California spokeswoman Kelly Green, eligible workers will take their premiums as if their income was just above the Medicaid eligibility level.
The state would factor in the employee’s federal subsidy and cover the difference. For example, a single person earning $54,360 per year can pay 8.5% of their earnings, or about $385 per month, in premiums under a medium-sized health plan. Under the new striking workers law, the person choosing the same plan would pay no bonuses for the duration of the strike—as if that person were making $20,385 a year.
The federal government approved an expanded subsidy under the American Rescue Plan Act. The extended subsidy will continue until 2025 under the Inflation Reduction Law. The state’s share of the subsidy could increase after federal funding ends.
An estimate the unions shared with the state said the law would cost California an average of $341 a month per worker with strikes lasting a month or two. Labor unions estimate the law will affect fewer than 5,000 workers a year. California has nearly 15 million private sector workers, and strikes are generally a last resort in labor negotiations.
It’s not clear how companies will react to this. Chevron, Stanford Health Care and Sequoia Hospital operator Dignity Health did not respond to requests for comment. The bill met no formal opposition from companies or taxpayer groups. Covered California’s subsidies are funded under the Affordable Care Act from a mix of federal and state funds, so there are no direct costs to businesses.
Last year, Gov. Gavin Newsom, a Democrat, signed the Public Workers Health Protection Act, which prevents public employers from terminating health insurance during a sanctioned strike. The new private sector law is different: there is no ban or fine for withdrawing healthcare during strikes.
Nationally, Democrats in the House and Senate have pushed for an outright ban on the practice, but none of the bills have emerged from committee.
If California workers lose their employer-sponsored health care benefits, they may be eligible for the state’s Medicaid program, known as Medi-Cal, or qualify for coverage through Covered California. With the latter option, workers could receive a range of grants to help pay their monthly premiums. In general, the lower the income of a household, the higher the subsidy.
But even if workers do qualify for Covered California, that insurance can be much more expensive than the plans they had through their job — sometimes consuming 30% to 40% of their income, proponents said. And workers who are on strike can experience delays as coverage may not take effect until the following month.
“This is one of the downsides of having a health care system tied to employment,” said Laurel Lucia, director of health care programs at the University of California-Berkeley Labor Center. “We’ve seen during the pandemic, when there were furloughs or layoffs, people lost their job-related protection when they needed it most.”
Striking Sequoia workers reached an agreement with Dignity Health and returned to the 208-bed facility before health insurance was suspended on Aug. 1, but some said they might have stayed on the picket lines longer had they not feared their benefits would be lost to lose.
“It was pretty scary,” said Mele Rosiles, a registered nursing assistant and member of the union’s negotiating team, who was pregnant at the time. “A majority of our employees felt threatened by this move by our employer to remove our family’s health insurance unless we return to work.”
The California Association of Health Plans raised concerns about an early version of the bill that would introduce a category for striking workers, but the industry group dropped its opposition when it was determined that Covered California could pass the change without them.
Covered California estimates it will spend approximately $1.4 million to launch this benefit. The agency said it will create application questions to look for eligible workers and will remind them to end coverage once they return to work.
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with Policy Analysis and Polling, KHN is one of the three major operational programs of the KFF (Kaiser Family Foundation). KFF is a donated non-profit organization that provides information on health issues to the nation.