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Online Seminar


September 18, 2012

In late August 2012, the San Francisco Public Health Department announced that rates will rise 9 to 13 cents an hour per employee for San Francisco’s pay-or-play health coverage option.

The 2013 health care expenditure rate for large employers—those with 100 or more workers—is $2.33 an hour for each employee, up from $2.20 an hour this year. For medium-size employers—those with 20-99 workers—the 2013 rate is $1.55 an hour, up from $1.46 an hour this year. The rates will take effect Jan. 1, 2013.

The San Francisco Health Care Security Ordinance passed in 2006. The ordinance caused a stir, with businesses arguing that the city could not implement the law without violating the Employee Retirement Income Security Act. After several rounds in the federal courts, the U.S. Court of Appeals for the Ninth Circuit found that the law was not preempted by ERISA and thus could be implemented.

Under the ordinance, employers deposit money with the city on behalf of their employees. The money is used to fund health care. Employees are enrolled in either Healthy San Francisco, in which workers receive a 75 percent discount on program participation fees, or a medical reimbursement account, in which out-of-pocket medical, dental, or vision costs are reimbursed.

Covered workers are those who:

(1) are entitled to be paid the minimum wage, (2) have been employed by their employer for at least 90 calendar days, and (3) perform at least eight hours of work per week within the geographic boundaries of San Francisco.

To be eligible for the Healthy San Francisco program, employees must be: (1) San Francisco residents with a combined family income at or below 500 percent of the federal poverty level (e.g., 2012 federal poverty level is $11,170 for household of 1 and $19,090 for household of 3); (2) uninsured for at least 90 days; (3) ineligible for public insurance programs such as Medi-Cal, Healthy Families, or Healthy Kids; and (4) between ages 18 and 64.

Small employers with 19 or fewer employees and nonprofit organizations with fewer than 50 workers are exempt from the employer spending requirement.

Healthy San Francisco enrollment reached 47,285 as of July 29, the most recent figure available. 09.18.2012

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