The San Francisco Health Care Security Ordinance (HCSO) requires that any employer in the city/county (not meeting the small group exception) pay a predetermined dollar amount towards the health care of their employees. If you have any full or part-time employees working in San Francisco or are contracted to conduct business in San Francisco, you are required to comply with the HCSO. Non-compliance can result in financial penalties (see further below for specifics).
The following items are required of all covered employers:
- Annual Reporting Form - Submission Required by April 30, 2016 Covered employers are required to complete and submit the Annual Reporting Form each year. The 2015 reporting form may be completed online at the HCSO website. For more information on how to Reporting Form visit the Employer Annual Reporting Form Instructions.
- Employer Spending Requirement Employers must satisfy the 2015 health care spending requirements for employees who have been employed for more than 90 days and who work at least 8 hours a week in San Francisco. There is an exemption for certain management and supervisory employees whose 2015 annual pay is at least $90,745 ($43.63/hour). Businesses who collect a surcharge from customers to cover the required expenditure in whole or in part must use all amounts received to pay health care costs for its covered employees.
- Annual Waiver Form - Required from Every Covered Employee Waiving Coverage Covered employees receiving medical benefits from another employer and choosing to waive the health reimbursement benefit are required to complete the Employee Voluntary Waiver. Third-party vendor waiver forms (such as health carrier waiver forms) are not compliant. Employees must complete a new waiver every year.
- Notice Requirement to Every Covered Employee - New 2016 Notice Covered employers must post the new 2016 Official OLSE Notice in a common area in every work place or job site where a covered employee works (it is not sufficient to leave the prior Notice in place since the 2015 spending requirements are different). The notice is available in six (6) different languages so employers can comply with language requirements. If more than 5% of employees at a worksite speak another language other than those already provided on the notice, the employer is responsible for translating and posting the notice in that language.
- Penalties for Non-Compliance
- $100 per employee per quarter when an employer does not make the required health care expenditure within five business days of the quarterly due date;
- $500 per quarter for failing to maintain or retain accurate and adequate records;
- $500 per quarter for failing to submit the annual reporting information;
- $25 per day per covered employee for failing to post the OLSE Notice.
Background Information on the HCSO
Employers who engage in business within San Francisco and have 20 or more employees (50 or more employees for non-profits) are subject to this ordinance. This includes employers based outside of San Francisco with employees working in the city/county as well as those contracting to conduct business within San Francisco. When counting total employees, be sure to count all full and part-time employees and not only employees working in San Francisco.