Ninth Circuit Upholds San Francisco’s Employer Health Care Mandate
Topics: Court Decisions
Despite hope for relief for San Francisco employers, yesterday the Ninth Circuit upheld San Francisco's Health Care Security Ordinance's employer spending requirement.
In November 2006, the Golden Gate Restaurant Association (GGRA) filed a lawsuit which challenged the employer spending requirement on the theory that it is preempted by the federal Employee Retirement Income Security Act (ERISA).The U.S. District Court agreed, and the City of San Francisco appealed the ruling.On April 17, the Ninth Circuit held oral arguments on the merits of the City's appeal.Yesterday, on September 30, the Ninth Circuit overturned the U.S. District Court's decision.It held that ERISA does not preempt the ordinance because it does not require employers to establish or alter ERISA plans.
The employer spending requirement, which became effective January 9, 2008, mandates that employers with 50 or more employees make minimum health care expenditures on behalf of covered employees on a quarterly basis.The ordinance became effective on April 21, 2008 for for-profit employers with 20-49 employees.The ordinance sets out a number of options for employers, including making payments for health care insurance, setting up health savings accounts, or providing direct reimbursement for health care costs.The next quarterly payments under the Ordinance are due on October 30, 2008.
It is expected that the GGRA will seek review of the Ninth Circuit's decision from the U.S. Supreme Court.