CITY INTRODUCES PAY OR PLAY PROPOSAL TO HELP PROVIDE HEALTH COVERAGE
April 24, 2007 - Mayor Bill White today announced a "Pay or Play" proposal to help provide health care to the workforce engaged in City contracting.
Contractors subject to the proposal would agree to either offer a minimal level of health care benefits to full-time employees ("play") or contribute to efforts to support the local network of medical service providers that form the "safety net" for persons without health insurance ("pay").
"The City of Houston is committed to fairness in the bidding process for contracts and the promotion of a work environment that will support a quality workforce," said Mayor Bill White. "The Pay or Play Proposal puts words into action by engaging the business community as partners in the challenge to support the workforce in the local community. Houston and Harris County have one of the largest populations of uninsured, including working individuals, and we're all subsidizing the costs one way or another, including through our taxes."
A contractor opting to "play" will offer a health benefit to full-time employees who work any number of hours on a City contract. The employer is free to choose the health plan best suited for the business, so long as (1) the employer contributes a minimum of $150 toward the monthly premium and (2) the employee pays no more than half of the monthly cost. The employee is not required to participate in the health plan, but the employer must make the offer.
"Paying" contractors will contribute $1 per hour worked by full-time employees on City projects to a fund dedicated to offset the cost of providing medical care to uninsured persons in the Houston area. The fund will not generate revenue for the City.
The proposal applies to firms that enter into contracts valued at or above $100,000 to provide services on City projects, including service-related subcontracts valued at or above $200,000. The proposal exempts certain classes of employees (volunteers, persons insured elsewhere, minors) and provides for waivers under very limited circumstances.
The Pay or Play Proposal levels the playing field for firms bidding on City contracts. Firms without the overhead costs associated with a health plan will lose what was an economic advantage over firms that do offer a health benefit. By removing obstacles to providing job-based health insurance, the proposal enables the City to contract for services with firms that can attract and retain good employees. The proposal will be ready for implementation before the fiscal year begins on July 1.
