The City lacks a method to track which companies are failing to comply with the San Francisco law requiring all employers to offer health care to their workers.
Under The City’s Health Care Security Ordinance, which was implemented in 2008, businesses must provide health insurance and spend an allocated amount per employee. Businesses that do not pay the required amount must pay the difference to The City.
If they do not provide insurance, they are required to pay into the system that provides health care for uninsured workers through the Healthy San Francisco program or pay the allocated amount per employee into a health care savings account. Businesses with fewer than 20 employees and nonprofits with fewer than 50 employees are not covered by the law.
But like many other laws, including minimum wage, The City does not have the manpower to enforce the 2-year-old law, Levitt said.
“We have no way to know that every employer complies with the law,” she said.
Mayor Gavin Newsom said he doubts the vast majority of businesses are complying with the law. The result: Not all employees are getting access to health care, which defeats the purpose of universal health care in San Francisco, city officials said.
There have been nearly 200 complaints of businesses not complying with the law since it passed two years ago, according to the San Francisco Office of Labor Standards Enforcement.
“It’s wrong because it puts those that are [complying] at a competitive disadvantage,” Newsom said. “It continues to be a concern.”
To incentivize compliance with the law, Newsom attempted to pass a $2,000 tax credit for businesses that participate in Healthy San Francisco. That tax break was shot down by city supervisors this year.
Scott Hauge, president of Small Business California, said there are two reasons businesses are not paying for health care: They are either unaware of the law or they are negligent.
Fees are set to increase next year, requiring businesses with more than 100 workers to pay $354.32 a month per employee. The increase amounts to roughly an additional $1,720 a month for a business with 100 employees.
“I still think there is a lot of confusion within the small-business community [about] whether they are subject to the health security ordinance,” Hauge said. “I also think that for some, the cost could be prohibitive so they ignore it hoping they can slip through.”