Background:
The City of San Francisco created the Health Care Security Ordinance (HCSO) in 2007 to subsidize medical care for uninsured residents of San Francisco. Upon implementation, it established employer healthcare-related obligations that are enforced by the Office of Labor Standards Enforcement (OLSE). It also created what’s now called Healthy San Francisco, a program that makes health services available and affordable to uninsured San Francisco residents; it’s administered by the San Francisco Department of Public Health.

2017 Rates:
All covered employers must meet certain obligations in accordance with the Health Care Security Ordinance (HCSO).
1. Records must be kept in a sufficient manner in order to establish their compliance with the employer spending requirement.
2. All workplaces with covered employees (those who have been employed for more than 90 days and regularly work at least 8 hours per week in San Francisco) must post an HCSO Notice.
3. An Annual Reporting Form must be submitted to the OLSE by April 30 of each year.
4. The Employer Spending Requirement must be satisfied by making required healthcare expenditures on behalf of all covered employees using the following rates for 2017.

Satisfying the Healthcare Expenditure:
Employers can choose how to make the required Healthcare Expenditures for their covered employees. A Healthcare Expenditure is any amount paid by the employer to its covered employee or third party on behalf of the covered employee or reimbursing the cost of such a service. Amounts paid for employees do NOT count towards the covered employer’s minimum Healthcare Expenditure. Some examples that meet the requirements of the HCSO of Health Care Expenditures are as follows:
- Payments for health insurance or payments to a healthcare provider to a third party for a covered employee
- Payments on behalf of the employee to the City Option; The City Option Program deposits money on behalf of employees to the Medical Reimbursement Account program and/or the Health San Francisco program
- Costs incurred by the employer in the direct delivery of healthcare services for the covered employee
- It’s important to note that payments made both directly or indirectly for workers’ compensation or Medicare benefits do NOT qualify as healthcare expenditures

Employers don't have to choose just one option to satisfy their obligation, but may combine the options (i.e. paying for health coverage for full-time employees and making contributions to the City Option for part time employees).

For more detailed information, please visit: http://www.sfgov.org/olse/hcso.

Information contained herein is not intended to constitute tax or legal advice and should not be used for purposes of evading or avoiding otherwise applicable regulatory responsibilities as issued by the federal or state government(s) and/or taxes owed under the Internal Revenue Code. You are encouraged to seek advice from your legal or tax advisor based on your circumstances.