Obama Stays Out of San Francisco Health Care Spending Case

By Staff Report

Jul. 22, 2009

The Obama administration has not joined employers in seeking a Supreme Court review of a federal appeals court ruling that upheld San Francisco’s controversial health care spending law.

The administration let pass the July 10 deadline for friend-of-the-court briefs to be filed in the case.

In an e-mailed statement, the Labor Department said the government generally does not file unsolicited briefs at the petition stage.

“This does not mean the Department of Labor or the solicitor general has taken any position on the case. It just means that the government will see whether the Supreme Court asks for the government’s views or grants certiorari,” according to the statement.

However, only a year earlier, the Labor Department filed an amicus brief with the 9th U.S. Circuit Court of Appeals, arguing that the law is barred by a provision in the Employee Retirement Income Security Act that pre-empts state and local rules that relate to employee benefit plans.

“If this court were to uphold the city ordinance, it would expose plan sponsors to the potentially contradictory regimes of numerous states, cities and other localities, and it would require plan sponsors to design and administer ERISA-covered plans in accordance with the dictates of local officials,” the brief stated.

Such a result would “wholly undermine Congress’ evident intent to permit the uniform nationwide administration of employee benefit plans,” the brief concluded.

The brief was filed during the last full year of the Bush administration. Since then, President Obama has expressed support for the San Francisco law.

“Instead of talking about health care, mayors like Gavin Newsom in San Francisco have been ensuring that those in need receive it,” the president said during a February meeting with several dozen mayors.

“I hope that the administration’s failure to file a brief simply reflects its focus on national health reform instead of reduced support for ERISA pre-emption,” said Andy Anderson, partner-elect with Morgan, Lewis & Bockius in Chicago.

The Golden Gate Restaurant Association is challenging the law and several major employer benefits lobbying groups, including the American Benefits Council and the ERISA Industry Committee, have filed amicus briefs asking the high court to review the case and arguing that ERISA pre-empts the San Francisco law.

The San Francisco law that went into effect last year requires employers with at least 100 employees to make health care expenditures of $1.85 per hour for every employee working at least eight hours per week. For employers with 20 to 99 employees, the contribution is $1.23 per hour. Employers with fewer than 20 employees are exempt from the spending mandate.

Expenditures can include payment of group health insurance premiums as well as contributions to health savings accounts, health reimbursement arrangements or to a city fund.

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

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