Obama Administration Dont Review San Francisco Health Care Law

By Staff Report

Jun. 3, 2010

The Obama administration is urging the U.S. Supreme Court not to review a 2008 appeals court ruling that upheld San Francisco’s controversial health care spending law.

The San Francisco law, which took effect in 2008, requires companies with at least 100 employees to spend at least $1.96 per hour per covered employee on health care, while employers with 20 to 99 employees must spend at least $1.31 an hour.

The spending requirement can be satisfied in various ways, including payment of employees’ health insurance premiums and contributions to health savings accounts and health reimbursement arrangements.

Last year, the Supreme Court asked the Justice Department for its opinion on whether the high court should review the 9th U.S. Circuit Court of Appeals decision. At the time the case was before the 9th Circuit, the Bush administration said the 2006 law violated the Employee Retirement Income Security Act, which pre-empts state and local laws and rules that relate to employee benefit plans.

But in a brief filed last week by acting Justice Department Solicitor General Neal Kumar Katyal and other attorneys at the Justice and Labor departments, the Obama administration said the Labor Department began to “re-examine” its views after the appeals court ruling.

The brief noted that since the 2008 ruling, Congress has passed comprehensive health care reform legislation. The health care reform law “significantly reduces the potential that state or local governments will choose to enact health care programs” like San Francisco’s and “may also affect the question whether such programs are pre-empted by federal law,” the brief said.

Just as the Labor Department decided that regulatory action on the pre-emption issue is premature, the Supreme Court’s “review of the issue is not warranted at this time,” the brief said.

The San Francisco law, challenged by a restaurant trade association, has attracted national attention from employer groups who feared that if the law is allowed to stand, it would lead other cities and states to pass health care spending measures and result in multistate employers having to comply with a hodgepodge of requirements.

But the interest of states and cities in such approaches has chilled since the federal health care reform law, which includes programs that will provide subsidized health coverage to the lower-income uninsured.  

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail


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