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Center for Labor Research and Education

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New study says health expansion helps business

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San Diego Union Tribune

The CalChamber, Republicans and a variety of small business groups argue that the employer fees contained in the two major health insurance expansion proposals being considered in California would force many firms to shut down or leave the state.

But a new study, prepared by the UC Berkeley Center for Labor Research and Education, says that the proposal would actually have a postive impact on the business climate. The study, released Wednesday, says that the new fees would have an impact similar to a modest increase in the minimum wage.

Those extra costs, however, would be offset by increased economic activity from new federal dollars and increased worker productivity that would come from expanding health insurance. Those millions of workers that would get health insurance would have fewer sick days and be more productive on the job, the study concludes.

The study analyzed a proposal by Republican Gov. Arnold Schwarzenegger to cover the state’s uninsured residents in part by requiring businesses with 10 or more employees that don’t cover their workers to pay fees of 4 percent of their payroll.

It also analyzed a proposal by Assembly Speaker Fabian Nunez, D-Los Angeles, to require firms that don’t cover their workers to pay a fee of 7.5 percent of their payroll to a fund to subsidize insurance policies for low-income residents.