San Francisco Health Care Security Ordinance -

This law only pertains to Employers who have Employees who work in the San Francisco area.

The “San Francisco Health Care Security Ordinance” requires employers to spend a minimum amount of money on healthcare expenditures for their covered employees. A healthcare expenditure is any amount paid by a covered employer to its employees or to a third party on behalf of the employees for the purpose of providing healthcare services.

For example:

• Paying health insurance premiums
• Payments to the city to fund membership in the Health Access Program
• Contributions on behalf of the employee to a health spending account like a HRA, FSA or medical/health savings account
• Cash reimbursements for expenses incurred in the purchase of health care services
• Costs incurred in the direct delivery of health care services, such as paying a health care provider directly for services rendered.

WHAT THIS MEANS TO YOU AS AN EMPLOYER
The first reporting requirement was due on April 1, 2008. The mailing of the form and notice was delayed, therefore, the deadline for returning the Annual Report Form has been extended to April 30, 2008. For Profit employers with 20 or more employees must comply, all employees count not just those working in San Francisco.

NOTE: The count of all employees comes into play when determining if the employer has to offer this coverage.  For profit employers must count all employees (no matter what state they work in) but would only offer the benefits to those that work in San Francisco.

Covered employees must be employed for at least 90 calendar days and work at least 10 hours per week in San Francisco.

Exempt employees are Managers, Supervisors and confidential employees earning more than $76,851 annually in 2008, employees covered by Medicare or Tricare, employees employed by a non-profit corporation as trainees for up to one year, employees already receiving benefits under the ordinance and any employee who waives the right to have coverage by their employer. Independent contractors do not apply.

An employee can waive coverage if they are receiving healthcare through another employer and knowingly and voluntarily waives the right to have the current employer make a contribution for benefits.

HOW IS THIS HEALTHCARE EXPENDITURE CALCULATED?
The minimum expenditure is calculated by multiplying the total number of “hours paid” to the employee by the applicable healthcare expenditure rate illustrated below.

Hours paid include both the hours the person is paid for work performed within San Francisco and hours entitled to be paid wages, such as, vacation hours, paid time off, sick leave hours not exceeding 172 hours in a single month or 516 hours in a single quarter. Overtime hours count as well but only up to the maximum hours. For self-funded plans, please see question #40 in the FAQ’s document.

Click HERE for a copy of the Employee Voluntary Waiver Form

Click HERE for a copy of the steps to determine whether a covered Employer has met its spending requirement under the San Francisco Health Care Security Ordinance (HCSO)

Click HERE for a copy of the 2008 Notice of San Francisco’s Health Care Security Ordinance (HCSO)

Click HERE for a copy of Frequently Asked Questions (FAQ’s)

WHAT SHOULD I DO NEXT?
Employers must report on the expenditures on an annual basis.Annual reporting must be done on the scannable form that was mailed to all registered businesses in San Francisco in the last week of January 2008 to the address listed on the employer’s business registration form. Remember, the deadline for returning the annual report form has been extended to April 30, 2008.

WANT TO LEARN MORE?
Corporate Synergies is on the cutting edge of employee benefits and continues to monitor developments in this area and will keep you informed of any additional changes as they occur. If you have any additional questions regarding the information within this eCommunication, please call Corporate Synergies at 1.866.CSG.1719 or click here to contact us today.