San Francisco Health Care Spending Requirement to Rise in 2010

Employers with employees working in San Francisco will have to pay more next year to comply with the city’s controversial health care spending law.

Beginning on January 1, employers with 100 or more employees will be required to spend $1.96 per hour per covered employee on health care, up from $1.85 in 2009, while employers with 20 to 99 employees must spend at least $1.31 per hour, up from $1.23, city officials announced Wednesday, April 22. Employers with fewer than 20 employees are exempt from the spending requirement.

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

The spending requirement applies to employees working at least eight hours per week.

Last year, a three-judge panel of the 9th U.S. Circuit Court of Appeals unanimously ruled, in a challenge to the 2006 law filed by a San Francisco area restaurant trade group, that the ordinance was not pre-empted by the federal Employee Retirement Income Security Act.

Earlier this year, the full appeals court declined to review the panel’s decision.

The Golden Gate Restaurant Association intends to ask the U.S. Supreme Court to review the appeal panel’s ruling.

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