A decision on whether San Francisco can require businesses to spend money on employee health care — a cornerstone of The City’s new universal health care program — could be decided by a federal judge today.
The $200 million program aims to provide sliding-scale health care to The City’s estimated 82,000 uninsured. An employer-spending mandate would contribute about
15 percent of the program’s total cost, according to city estimates.
Earlier this year, lawyers representing San Francisco’s restaurant owners sued The City, charging that the program violated the Employee Retirement Income Security Act, a federal law that regulates the management of employee benefits. A state or local law cannot pre-empt the federal law, the lawyers for the Golden Gate Restaurant Association have argued.
This morning, the lawsuit is scheduled be heard before U.S. District Court Judge Jeffrey S. White, who sent over some last-minute questions Thursday.
Deputy City Attorney Vince Chhabria said that one of White’s questions suggests that The City could have legally passed an ordinance requiring all employers to pay a tax to help fund The City’s new health care program. A law that in essence does that, but that also provides “credit” if a business owner already invests in employee health care, isn’t regulating benefits, he said.
Despite the legal uncertainty of the employer-spending component, The City began implementing the ordinance — under the name Healthy San Francisco — in July by enrolling a limited number of patients. A broader rollout started in September, and full enrollment is scheduled for January.
Kevin Westlye, the executive director of the restaurant association, said The City should have pursued a quarter-cent sales tax to cover the health care program’s costs, which would have shared the burden among all San Franciscans and not put the financial
weight just on businesses.
Mayor Gavin Newsom saidthe mandated spending — requiring all employers with 20 workers or more to eventually invest $1.23 to $1.85 for each employee hour worked for health care — was necessary in order to prevent businesses from looking at The City’s new universal health program as an opportunity to stop providing health benefits to their employees.
“It’s not about a sales tax, it’s not about the money, it’s about the perversity and the incentive that would be created to dump health insurance if The City picked up the responsibility,” Newsom said. “That increases the total number of uninsured in the program, and it will no longer work.”
Newsom said The City would appeal if the judge ruled against the employer-spending mandate. He said he was committed to
moving forward with the Healthy San Francisco program no matter what happened in court.