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Local Governments Act on No-Benefit Employers

Armen Hareyan's picture

Employee Insurance

Suffolk County, New York became the latest local government to take action to protect employees from large employers who refuse to offer affordable health insurance benefits.

In this Republican-dominated county, County Executive Steve Levy signed into law a provision requiring large grocery retailers to pay for their employees' health care costs. Suffolk County follows New York City, which recently passed a similar initiative. The county legislature backed the proposal with a vote of 17-1.

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Under the new law, large grocery retailers, including Wal-Mart and Target, must set aside $3 per hour towards paying healthcare costs, and cannot pass on the costs to employees.

Wal-Mart critics and legislators, including Suffolk County legislators William Lindsay (D) and Paul Tonna (R), cited studies showing that Wal-Mart requires employees to pay a large portion of the cost of employee health care, with the result that many employees are underinsured, uninsured, or must turn to Medicaid for coverage, shifting employee health care costs to taxpayers.

New York City Mayor Michael R. Bloomberg vetoed the New York City bill, saying the measure violated a federal ERISA law prohibiting states from regulating private employer health plans. The New York City Council overrode his veto on October 11. Suffolk legislators said that law did not apply to counties.