BILL NUMBER: AB 1865INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Patterson FEBRUARY 10, 2016 An act to add Chapter 2.5 (commencing with Section 325) to Part 1 of Division 2 of the Labor Code, relating to contractors. LEGISLATIVE COUNSEL'S DIGEST AB 1865, as introduced, Patterson. Contractors: trust or custodial benefits plans: health benefits. Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that take effect January 1, 2014. Among other things, the PPACA requires a health insurance issuer that offers coverage in the small group or individual market to ensure that the coverage includes the essential health benefits package, as defined, and describes essential health benefits for that purpose. Existing law states that it is the policy of this state to vigorously enforce the laws requiring employers to secure the payment of compensation for workers, as specified. Existing law defines a project labor agreement, as specified. Under existing law, a project labor agreement may include a trust or custodial benefit plan to provide health and welfare or similar benefits for workers. This bill would exempt a contractor that bids on or has been awarded work covered by a project labor agreement entered into on or after January 1, 2017, which contractor provides health care coverage to workers on the project subject to the agreement that includes certain essential health benefits and which provides evidence of that coverage to the entity awarding the contract, from a project labor agreement requirement to pay into a trust or custodial benefit plan for health and welfare or similar benefits for those workers, in an amount equal to the amount that the contractor would otherwise have been required to pay into that trust or custodial benefit plan for health care costs for those workers. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Chapter 2.5 (commencing with Section 325) is added to Part 1 of Division 2 of the Labor Code, to read: CHAPTER 2.5. CONTRACTORS: EMPLOYEE HEALTH BENEFITS. 325. As used in this chapter: (a) "Project labor agreement" means a prehire collective bargaining agreement entered into on or after January 1, 2017, that establishes the terms and conditions of employment for a specific construction project and is an agreement described in Section 158(f) of Title 29 of the United States Code. (b) "PPACA" means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public law 111-152), and any rules, regulations, or guidance issued thereunder. 326. (a) A contractor that bids on or has been awarded work covered by a project labor agreement, which contractor provides health care coverage to workers on the project subject to the agreement that includes essential health benefits as described in the PPACA in Section 18022 of Title 42 of the United States Code, and which provides evidence of that coverage to the entity awarding the contract, is exempt from a project labor agreement requirement to pay into a trust or custodial benefit plan designated by the project labor agreement to provide health and welfare or similar benefits for those workers, in an amount equal to the amount that the contractor would otherwise have been required to pay into that trust or custodial benefit plan for health care costs for those workers. (b) This chapter does not apply to labor union members covered by a multiemployer plan authorized under Section 302(c)(5) of the federal Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) that provides health care coverage who are dispatched by a labor union hiring hall to a project awarded to a nonunion contractor.