HealthySF loophole disgraceful

The 734 San Francisco businesses that complied with the controversial HealthySF law’s April 30 deadline to send in the first health-insurance payments for 12,900 employees cannot be blamed if they feel cheated by City Hall. They are being penalized for obeying the law and paying on time.

It now appears that HealthySF scofflaws will not be held accountable unless there is a complaint from someone — presumably an uninsured employee — or until the required annual compliance report is filed at year’s end. This embarrassing loophole opens a perfect opportunity for employers to gain a temporary competitive advantage by delaying obligatory payments until the last allowable moment.

San Francisco has at least 42,000 businesses with 50 or more employees. Obviously, the vast majority have not yet paid directly toward HealthySF mandatory coverage. Of course, as many as 97 percent of those employers are believed to provide some form of health insurance. It just remains unknown whether or not they pay as much as the new law demands.

Frankly, we can understand why many of The City’s businesses are tempted to delay their HealthySF payments while they can legally do so. The Examiner agrees that HealthySF’s goal of providing health care coverage to San Francisco’s 82,000 uninsured residents is worthwhile. But from the start, we have held that the$198 million program risks the loss of too many local jobs by burdening employers with yet another tax and regulatory cost that neighboring competitors do not pay.

The 800-member Golden Gate Restaurant Association has sued The City to try and stop HealthySF, and a decision is due soon from the 9th Circuit Court of Appeals. Meanwhile, Mayor Gavin Newsom has told The Examiner that numerous businesses are confused about their HealthySF obligations and want the court ruling to clarify matters. Widespread confusion arose from repeated shifts in deadlines and starting dates, differing requirements for businesses of varying sizes and unclear coverage-plan options.

City officials are eager to collect the $28 million they expect local business owners to contribute toward HealthySF. So the very least City Hall should be expected to do is administer the program competently and fairly. Busy, hard-pressed small employers should have been fully informed early on about exactly what will be expected from them as long as HealthySF withstands court challenges.

And now, enforcement of the employee health-insurance mandate must become fair and equal for every business in The City. The payment deadline loophole should never have been allowed to slip through, and now it must be shut down at once. It is totally unacceptable for employers that obey the law to be forced to pay while violators are let off.

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