San Francisco nears compromise on employer health funds

The Board of Supervisors’ effort to close a loophole in San Francisco’s landmark universal health care law remains the center of debate despite months of discussions and political wrangling over how to fix the problem.

But it appears a compromise has emerged that everyone can live with.

One proposal introduced by Supervisor David Campos was approved by the board, but only with six votes, and then Mayor Ed Lee vetoed it last week.

Now the board is focused on a different solution, which was introduced by Board of Supervisors President David Chiu as a compromise with business advocates who denounced an earlier proposal by  Campos.

About 860 businesses — mostly restaurants — put money in what is known as a health reimbursement account to comply with the law, which mandates a certain amount of money is spent per employee per hour worked. It was recently exposed that 80 percent of the money for worker health care costs returns to the employer, which amounted to $50 million last year.

The main issue is how much and for how long money should remain in the accounts. Campos’ proposal would have the money remain in the accounts year after year. But business advocates said that would be a $50 million hit and result in job losses and even business closures.

Chiu’s original legislation proposed requiring that accounts have a year’s worth of funding at any given time. On Tuesday, Supervisor Malia Cohen amended Chiu’s legislation to ensure workers could accrue up to two years’ worth of health care funding at any given time — a proposal that appears to have the support of most of her colleagues. Chiu said that “the two-year time frame does make sense.”

“These amendments are the result of many, many months of conversations with many stakeholders,” Cohen said.

Lee signaled his support of the amended legislation Tuesday.

“By closing the loophole through these proposed amendments, we can increase access to health care, protect jobs in our small businesses and protect consumers while growing our economy at the same time,” Lee said in a statement. “These are goals I have embraced from the beginning of this discussion, and I thank the board for putting forward amendments that align with these goals.”

Campos, who realizes his proposal is doomed by Lee’s veto, supported the spirit of Cohen’s amendments.

“I’m still trying to understand the implications of the amendments, but I think that it’s a very positive step forward,” he said.

The board is scheduled to take a vote on the amended legislation Nov. 15.

jsabatini@sfexaminer.com

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