California Gov. Arnold Schwarzenegger has vetoed Assembly Bill 8, a measure passed during the regular legislative session that would have required employers to provide health insurance to their employees or pay a tax to the state.

In a statement announcing the Friday, October 12, veto, the governor said, "This bill does not achieve coverage for all-a critical step needed to reduce health care costs for everyone. Instead, A.B. 8 puts more pressure on an already broken health care system and places an unreasonable financial burden on businesses. A 7.5 percent  fee would force employers to shoulder the entire burden of health care reform-a devastating blow to small business in California."

Among other things, A.B. 8-which was co-sponsored by Assembly Speaker Fabian Nuñez, D-Los Angeles, and Senate President Pro Tem Don Perata, D-Oakland-would have required all employers to offer coverage to their workers equal to 7.5 percent of payroll or pay an equivalent tax to the state, which would provide health care coverage to their workers for them.

The veto followed Schwarzenegger’s introduction of his own health reform plan in bill form last week.

Filed by Joanne Wojcik of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.