Author: jfortenberry@fortenberrylaw.com

Governor Gray Davis of California signed SB 2, the Health Insurance Act of 2003, requiring large employers to provide health insurance for their employers. The following articles are reporting the news:

• “Davis approves health care bill: Businesses will need to provide insurance for their workers or pay into a state pool“: the Sacramento Bee
• “Employers expected to fight new worker health insurance law“: SFGate.com
• “Davis signs bill requiring health insurance for workers“: the Associated Press via the Mercury News

Previous posts on the subject can be found here.

This U.S. Newswire from the Foundation for Taxpayer and Consumer Rights -“Calif. Law Could be National Health Care Model if Cost Controls are Adopted, Says FTCR“–is calling on legislative leadership to learn from Hawaii’s experience with a similar law and provide “cost controls”:

Hawaii’s 30-year experience with a similarly constructed “pay or play” system has shown that “without cost controls, the solvency and stability of the health care system is threatened,” according to Flanagan:

— After 3 consecutive years of 10-28 percent premium increases, the Chamber of Commerce of Hawaii asked the state legislature and the governor to provide independent oversight of rates in 2002.

— During that same year, health care premiums had increased 250 times faster than medical inflation.

— The Hawaii legislature approved, and the Governor signed, legislation allowing a regulator to deny unfair premium increases.

UPDATE: SFGate.com has posted a very detailed article on the legislation: “Health insurance bill revives national debate.” The article describes how the legislation was specifically written in a way to survive an ERISA challenge:

SB2’s authors used a legal stratagem to skirt ERISA. They contend that the bill does not actually order employers to provide health insurance, but instead requires them to contribute to a new state fund that will buy coverage for the uninsured. Companies could avoid paying this fee if they offer a level of insurance consistent with SB2’s provisions.

Supporters say that if SB2 is challenged in court, they will try to get a congressional exemption from ERISA, as the state of Hawaii did. Hawaii, still the only state in the country with employer-mandated coverage, got the exemption because its program was implemented before the law took effect.

Thanks to the Westminster Law Library at the University of Denver, College of Law, for listing Benefitsblog in their Selected Blawgs list. The Westminster Law Library also has some good information on blawgs generally at this link as well as some great links under Tax Resources and Securities Law Resources.

The Groom Law Group has a good summary of Tittle v. Enron Corp., 2003 WL 22245394 (S.D. Tex. Sept. 30, 2003) (331 pages) which was issued last Wednesday and which was discussed in previous posts here and here: “Executive Summary – Enron ERISA Litigation Ruling.” There is also a chart summarizing the claims which you can access here.

The Groom Law Group has a good summary of Tittle v. Enron Corp., 2003 WL 22245394 (S.D. Tex. Sept. 30, 2003) (331 pages) which was issued last Wednesday and which was discussed in previous posts here and here: “Executive Summary – Enron ERISA Litigation Ruling.” There is also a chart summarizing the claims which you can access here.

This in-depth article at CFO.com–“Whistle-blowers Woes“–discusses how employers and “whistle-blowers” are being impacted in the workplace by these new provisions of the Sarbanes-Oxley Act of 2002.

Also, at CFO.com, this very relevant article: “Above Board: Regulators and shareholders want compensation committees to explain why CEOs make so much.”

From Reuters: “Northern Trust Pension Suit an Eye-Opener.” The article quotes Eli Gottesdiener, a lawyer representing Enron employees, as saying that the decision made clear the responsibly that trustees have in protecting pension funds, even if they are told what to do by the companies that employ them. “This is huge in terms of precedent,” he said. “It establishes that even directed trustees have fiduciary obligations and cannot blindly follow orders.”

Additional Quote of Note: “The court’s decision could put more of an onus on trustees, said Scott Henderson, a lawyer who specializes in investment management and matters of pension funds for Boston-based law firm Bingham McCutchen LLP. While directed trustees have no discretion on investments, Henderson said they might have to start assessing the risk of including company stock in pension investments. “Pension funds are already nervous about the role company stock plays in their investment line-up,” he said. “Now they could be responsible for assessing the quality of company stock.”

Links to the Enron case and other articles at this previous post today.

Lyle Roberts at the 10b-5 Daily blog has a post on the Enron case as well.