Small businesses will suffer the most if legislation is adopted requiring all city employers to pay for worker health care, and as many as 590 jobs would be lost, according to a city controller’s report released Friday.
The business community was quick to use the report’s findings as ammunition against Supervisor Tom Ammiano’s proposed health care legislation, saying the costs would ruin many small businesses.
But supporters downplayed the negatives, saying businesses would rebound, new jobs would be created in the health care industry and more residents would have health care coverage.
The proposed legislation impacts businesses that employ 20 workers or more, legally requiring them to pay for health coverage for their workers. Businesses with 20-99 workers would have to pay $1.06 an hour per worker, while those with 100 or more would have to pay $1.60.
“For the vast majority of the businesses, there will be little to no impact,” said Ken Jacobs, deputy chair of UC Berkeley’s Labor Research and Education, who worked on The City’s health care council. Jacobs said most city businesses already provide health coverage for their employees.
But the business community, which largely opposes the legislation, disagrees.
“There is no doubt that the businesses of 20 to 100 employees will be impacted directly. Jobs will be lost. Restaurants will close,” said Nathan Nayman, executive director of Committee on Jobs, one of San Francisco leading business groups. According to the report, some employers will pass the added costs on to customers, while other will cut jobs or shut down the business.
Those with fewer than 100 workers would end up paying $2,194 a year per worker, between $44,000 and $110,000 a year total, generating as much as $31 million, according to the report.
Business owners with 100 or more employees would pay annually $3,291 per employee, which is expected to generate as much as $18 million. The total money generated, nearly $50 million, could result in as many as 20,000 workers receiving health care coverage.
The legislation does not address businesses with fewer than 20 workers, which account for about 60,000 of The City’s 85,000 businesses, Jacobs said
Ammiano’s legislation would generate funding for Mayor Gavin Newsom’s health care plan for uninsured workers, which Newsom announced last Tuesday. Newsom’s proposal would provide a health care access program for the estimated 82,000 adults who are living in San Francisco without health insurance. Newsom’s proposal would cost $200 million a year.
The Board of Supervisors Budget and Finance Committee will review Ammiano’s legislation on Monday.