Airlines, business groups fight new health insurance requirements for SFO workers

Heathy Airport Ordinance would require companies to offer family coverage or increase contributions

An ordinance to expand affordable health care coverage to airport workers and their families, many of whom are low-income and persons of color, was met with strong opposition from the airline industry and local business interests at the Board of Supervisors Budget and Finance Committee Wednesday.

The Healthy Airport Ordinance would require airlines and airport contractors that operate at San Francisco International Airport, some of whom only offer employees individual insurance, to expand coverage to workers and their families at no cost to the employee, regardless of how many average weekly hours an individual works.

Companies would also have the option to instead contribute $9.50 per hour — up from $5.60 per hour — on behalf of each employee into the existing city-run health care account run by the Department of Health, which currently covers some airport workers and provides them with a suite of health care options including coverage of their dependents.

Airlines say the new requirement would drastically increase the cost of doing business at SFO and threaten further injury to an industry already on life support due to the coronavirus pandemic and its decimation on air travel. They say the result would be higher cost to travelers and damage to local businesses that depend on a robust tourism market.

“We are far from out of the woods on being able to protect and grow jobs, and quite simply, we cannot afford additional costs,” a representative from Delta Airlines testified during public comment.

Workers at SFO say their health care costs rapidly outpace their low wages, and even with insurance, they can’t afford the copays or deductibles. Consequently, they often face the choice between seeking medical help or paying other key expenses such as rent, groceries or child care.

Now, in the throes of the pandemic, these essential workers who don’t have the option to work from home are faced with another choice: go to work and risk contracting the virus with inadequate means to pay for it or stay home and forego wages.

Melieni Cruz, who works in a catering kitchen for SkyChef, says her deductibles are so high that she owes $5,000 in medical debt after undergoing a surgery to remove ovarian cysts. She worked for one year without treatment to save up for the treatment despite excruciating pain.

“I only make $18 per hour,” she said. “Now, with COVID-19, I hope I don’t have to go to the doctor.”

There have been at least 142 confirmed COVID-19 cases within the SFO workforce as of Wednesday’s meeting, according to ordinance co-sponsor Rafael Mandelman.

The Examiner broke news of an outbreak and apparent cover-up by ABM Aviation, an SFO contractor that provides in-flight amenities and cabin cleaning services to various airlines. Later, catering workers at another contractor, Gate Gourmet, also reported positive cases among employees.

Supervisor Shamann Walton, also a co-sponsor of the ordinance, led roughly 180 airport workers in a chant at a virtual rally Wednesday before the meeting that encapsulated the goals of this ordinance, if passed: “One job should be enough!”

“This is really important legislation because what it does is provide equity to our airport workers,” he told attendees. “If you work, you deserve to be able to make sure that you and your family have the health care coverage you deserve.”

Airline representatives came out in full-throated opposition to the Healthy Airport Ordinance at Wednesday’s committee meeting. They said the proposal would directly increase costs to airlines and airport contractors, already paying a premium to operate at SFO, lead to significant job cuts and ultimately make tickets more costly to traveling passengers.

A representative from JetBlue testified that the higher costs caused by the ordinance would “change the economics of SFO” and “could threaten new entrants” like his airline from starting service, thus “decreasing competition and negatively impacting the traveling public.”

Airline company spokespersons also said passage of the proposal would undo positive existing relationships between companies and their labor partners, since the ordinance stipulates its requirements can’t be waived with a collective bargaining agreement.

The San Francisco Chamber of Commerce and Hotel Council weighed in during public comment, too, raising concerns that it would have an indirect but profoundly negative impact on local businesses that operate in the airport and hurt local hospitality providers that rely on steady tourism traffic through SFO.

Calling SFO the “lynchpin for recovery” in San Francisco, a number of economic professionals characterized the ordinance as imposing an “unnecessary” cost to airport employers and undercutting The City in its effort to recover.

A report from the Budget and Legislative Analyst estimates the ordinance would make 4,260 employees eligible for family health care benefits at an additional cost of roughly $8.4 million to $24 million borne by the impacted companies every year.

Should companies elect to make the contribution to the Department of Public Health on behalf of employees instead, total costs incurred could reach approximately $33 million.

“While these costs are not directly passed on to the airport, they increase the cost of doing business for airport tenants,” the BLA report stated.

Using a baseline of 18.4 million passengers in the current fiscal year — a far cry from the roughly 57 million of recent years past — the BLA report estimates the added costs would lead to a fare increase of $1.83 per ticket.

Airline and business representatives believe the impact on job loss, company costs and ticket price would be far greater.

Ultimately, the hearing was continued to next week, when the committee will have the opportunity to recommend the legislation for approval by the full Board of Supervisors — or not.

‘We need a place to take a shower and feel welcomed’

Tenderloin linkage center opens one month after Mayor Breed’s emergency declaration

100 years of the San Francisco Opera

Centennial season opens with world premiere of ‘Antony and Cleopatra’ by John Adams

How an improv show hit Broadway, won a Tony Award and is now at ACT

S.F. actor Anthony Veneziale gives the backstory on “Freestyle Love Supreme”