Budget Signed, Healthcare Law Upheld

On Wednesday afternoon, Governor Jerry Brown signed the 2012-2013 State Budget with very little fanfare. This morning, the U.S. Supreme Court issued its long-awaited decision regarding the Patient Protection and Affordable Care Act (PPACA).

Governor Brown Signs 2012-2013 State Budget

Late Wednesday night, Governor Jerry Brown signed a $91 billion budget for the 2012-13 budget year, which begins on Sunday.

Faced with a nearly $16 billion deficit, both houses of the Legislature and the Governor struggled over where to cut spending and find savings. Among the numerous impacts, one of the more significant is savings created by shifting 880,000 low-income children from Healthy Families to Medi-Cal. The budget also cuts funding for trial courts and allows for a 5% pay cut for state workers through 12 unpaid days off per year.

Although the budget is finalized on paper several impacts are still unknown. The Governor has placed an initiative on the November ballot critical to the state’s finances which will raise taxes on California’s top wage earners. If voters reject the Governor’s initiative it will automatically trigger several significant cuts, particularly in the education. This initiative relieved the Governor and Legislature from looking at increasing taxes through the budget process, most likely on businesses, which is why CGA supported the Governor going to the ballot.

A synopsis of the budget can be found here on Governor Brown’s website.

U.S. Supreme Court Upholds the Patient Protection and Affordable Care Act

Today, the U.S. Supreme Court rendered its decision to uphold the Patient Protection and Affordable Care Act (PPACA) on a 5-4 vote with Chief Justice John Roberts providing the swing vote. The effects of this landmark ruling on the grocery industry is largely unknown and still to be determined by regulation, but there are some key components to closely monitor.

Government agencies will soon release criteria that will determine which employees must be offered health insurance under the new law. If companies choose not to offer that insurance, they must pay an additional tax penalty.

Other significant components primarily affecting the grocery industry is a food menu labeling requirement and drug prescription requirement. Included in the PPACA is language regarding menu labeling for restaurants. The FDA issued a proposed rule that included grocery stores under the scope of the menu labeling requirement. However, the FDA also included an option that would limit restaurant menu labeling to establishments with 50% or more of their floor space devoted to restaurant or restaurant-type food. No word on which option the FDA will enforce. You can read more about menu labeling here.

Finally, the PPACA requires a doctor’s prescription before a customer can use an FSA debit card to purchase over-the-counter medications at local food stores.