What Is The HCSO? The Health Care Security Ordinance (“HCSO”) was unanimously passed by the San Francisco Board of Supervisors on July 18, 2006, and Mayor Gavin Newsom signed it into law. The purpose of the legislation is to ensure that all individuals who live or work in San Francisco have access to affordable health care by requiring businesses to make certain health care expenditures on behalf of their covered employees. The implementation of that ordinance was put on hold by United States District Judge Jeffrey White. However, on January 9, 2008, a three-judge panel of the Ninth Circuit Court of Appeals stayed Judge White’s Order and, therefore, allowed the San Francisco ordinance to become effective subject to later review by the Ninth Circuit. The bottom line is that as of January 9, 2008, San Francisco employers must comply with the universal health care law unless or until it is further enjoined.

Does This Apply To Your Company? Employers covered by the HCSO are those that (1) do business within San Francisco and are required to obtain a valid San Francisco business registration certificate, and (2) employ 20 or more employees per week. Regardless of where the employer is located, all persons performing work for the employer are counted, whether or not the persons live or work in San Francisco.

What Do You Need To Do To Comply?

(1) Determine which of your employees are covered by the HCSO, which are those employees performing, on average, at least 10 hours of work per week within San Francisco.

(2) Calculate your Health Care Expenditure for each covered employee to ensure it meets the minimum of $1.76 per hour worked (for employers with 100 or more employees).

(3) If your Health Care Expenditure is below the minimum, choose an option to meet the required expenditure, including private health insurance, Healthy San Francisco program, or health spending account.

(4) You must also provide employee notices, ensure proper recordkeeping, and comply with annual reporting requirements.

Because the HCSO is brand new, San Francisco’s Office of Labor Standards Enforcement is still working out the details.