Assemblyman Jimmy Gomez, D-Los Angeles, was granted reconsideration after his Assembly Bill 880 failed on three roll call votes.
Gomez conceivably could take the bill up again, but Democrats will lose their supermajority Sunday, clouding prospects for a future vote.
The final tally Thursday was 46-27, eight votes shy of passage.
The vote on AB 880 was closely watched statewide as a test of Democrats' supermajority because it forced moderate lawmakers in the party to stand with or to buck their more liberal colleagues in the lower house.
Three Assembly Democrats voted against it: Cheryl Brown of San Bernardino, Tom Daly of Anaheim, and Adam Gray of Merced. Five party colleagues did not vote: Henry T. Perea of Fresno, Raul Bocanegra of Pacoima, Steve Fox of Lancaster, Rudy Salas of Bakersfield, and Al Muratsuchi of Torrance.
Lobbying was intense, pitting organized labor against business groups on a top-priority issue for both.
The Assembly was running out of time to act on the bill because it required a two-thirds vote for passage and Democrats will lose their supermajority when Assemblyman Bob Blumenfield resigns Sunday to join the Los Angeles City Council.
The California Labor Federation and the United Food and Commercial Workers, sponsors of AB 880, claim that it would close a loophole that allows the state's largest businesses -- 500 employees or more -- to avoid subsidizing employee medical insurance under next year's federal health care overhaul.
Federal law will penalize businesses if employees who work 30 hours a week are forced to buy health insurance from a new state exchange next year because they are not covered by an employer plan.
No penalty is provided under current law if compensation is low enough to push employees onto Medi-Cal rolls, meaning income of about $15,900 for an individual or $32,500 for a family of four. AB 880 would close that gap by penalizing firms about $4,400 for each employee on Medi-Cal who works at least 12 hours per week.
The California Chamber of Commerce has labeled AB 880 a "job killer" bill. Business groups contend it would be a drag on the economy, discourage the hiring of part-time workers, and that it is premature because the federal health care overhaul has not yet been implemented.
Organized labor has accused Wal-Mart of practices targeted by AB 880. The giant retailer, in a written statement, counters that its wages and benefits "meet or exceed those offered by most competitors and our health care offerings go beyond the eligibility and affordability requirements of the Affordable Care Act."
PHOTO: First-term Assemblyman Jimmy Gomez, D- Los Angeles listens during the first day of the legislative session at the state Capitol in Sacramento on Monday, Dec. 3, 2012. The Sacramento Bee/ Hector Amezcua