Healthy San Francisco Has Increased Access, Reduced Utilization

The city's Health Care Security Ordinance of 2006 established the employer mandate that took effect on Jan. 9, 2008 for large employers, and April 1, 2008, for medium-sized employers, six or nine months after the start of Healthy San Francisco. Employers with 20 or more full or part-time employees must spend $1.23 per worker hour Employers with 100 or more employees must spend $1.85 per hour; those rates will go up to $1.31 and $1.96 next year.

As of December 14, 2008, more than 850 employers covering nearly 33,000 employees had elected to use the city option, contributing $37.3 million to the city, roughly half to Healthy San Francisco and half to the Medical Reimbursement Account.

But it is too early to know whether all the employers who are required to pay or play are actually doing so.

Applicable employers had until just two months ago, April 30, 2009, to file a "mandatory annual reporting form," indicating precisely how they complied, and whether they had "paid" into the city's Healthy San Francisco plan, or "played," by spending at least that amount on an employee health plan.

Two months after that deadline, employers returned 5,000 of those forms to the city, says Joannie C. Chang, contract compliance officer with the city's Office of Labor Standards Enforcement. However, some of the employers were apparently confused and did not fill out the forms correctly, requiring the city to make follow-up calls to verify the accuracy of the data they submitted.

Chang says that "overall, I believe there's been good rates of compliance," adding that the city has conducted 70 presentations to employers, human resources consultants as well as mailings, "so most employers are aware of their obligations."

For those employers found to be out of compliance, she says, "the biggest challenge is making sure they understand the legal requirements, but once they do, they comply."

Chang says the city has 187 open investigations, about half initiated by employees who realized they were not receiving benefits, and the other half involving employers who recently learned about the law and sought assistance from our office to come into compliance.

"Given the city's budget and our limited staffing at this time, we definitely have our work cut out for us," Chang says.

Restaurant group suit

Another looming issue is the staunch objections to the ordinance now being litigated by the Golden Gate Restaurant Association. A three-judge panel with the Ninth Circuit Court of Appeals ruled in favor of San Francisco last September, but the association has appealed that decision to the U.S. Supreme Court.

The association, which represents 800 restaurants in the city limits, including some of the city's largest, supported the original legislation that created Healthy San Francisco, but takes issue with the employer mandate saying it is way to excessive.