Healthy S.F. fees shouldn’t go to business owners

Diners in San Francisco see the note on the bill all the time — text saying a fee has been added to the tab to pay for workers’ health insurance through Healthy San Francisco, The City’s universal health care program.

When the program started in 2008, its goal was to provide universal health care for San Franciscans and those who work at businesses in The City. It tasked employers with spending at least a minimum amount on health insurance, which could be done by paying into a fund for Healthy San Francisco. Many businesses took to charging a small fee to customers to help offset the costs.

When the fees first appeared, there was a great deal of complaining from people frequenting eating establishments. Eventually, the griping died down as many people acquiesced to paying, especially since the money was going to health care for the hardworking employees.

But a recent report by The Associated Press shows that a chunk of the money collected through these fees has not been spent on health care for the workers. Eateries and other businesses collected $14 million in extra Healthy San Francisco-related fees, which can range from 3 percent to 5 percent, according to the AP report. But only
40 percent of what has been collected was actually spent on worker health care, the AP reported.

This is not the first time this issue has arisen. Years after Healthy San Francisco went into effect, it was discovered that companies were pocketing the unspent fees at the end of the year. Critics charged that the companies were profiting under the guise of collecting money for their workers, and legislation was passed to require them to keep leftover money available to workers for up to two years.

Then, in July, a civil grand jury report criticized the fees businesses charge. The report — titled “Surcharges and Healthy San Francisco: Healthy for Whom?” — pointed out that people often think the surcharges they are paying go directly to health care costs for employees, when actually they may not.

The AP obtained documents that show 172 businesses in San Francisco reported imposing surcharges to help offset Healthy San Francisco costs, though even more may be charging fees and not reporting them. Some eateries have collected fees surpassing $100,000 and yet haven’t paid out a penny in health care costs. The explanations for these paltry payouts include the limits on use of health care funds, the confusion surrounding the structure of the programs and the general healthiness of young workers who may not need to dip into the funds.

The full effects of the legislation requiring employers to keep the fees for up to two years is yet to be seen, so it is too early to definitively say the surcharges are not helping workers. But it is clear there is a potential problem lurking in the Healthy San Francisco program that city officials need to keep on their radar.

People in The City cannot continue to pay fees that never make it to the workers to pay for their health care.

Labor, businesses and city officials need to ensure that companies are able to collect fees needed to cover their costs in the program, but also — more importantly — that the workers are receiving the benefits of the money collected.

editorialsHealthy San FranciscoOpinionSan Francisco Civil Grand Jury

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