San Francisco Health Care Accountability Ordinance & Health Care Security Ordinance Updates

HCAO

Effective July 1, 2024, the Health Care Accountability Ordinance (“HCAO”) Fee Rate will increase to $6.75 per hour with a weekly maximum cap of $270.  Updated posters and forms are available on the HCAO Webpage.

HCSO Updates

The San Francisco Health Care Security Ordinance (‘HCSO”) requires covered employers to make health care expenditures on behalf of certain “covered employees.” Employers generally satisfy the health care expenditure requirements through a combination of the employer-share of the premium for typical health plan enrollment (when offered), Health Savings Account (“HSA”) contributions, and, primarily, City Option contributions. Aspects of the HCSO are not intuitive for employers—including the requirement to make City Option contributions for certain employees who declined the health plan and the eight-hour per week covered employee threshold.

Employer Action Items

HCAO

Implement the new rate increase of $6.75 per hour (weekly cap of $270) with internal accounts payable systems. 

HCSO

The HCSO generally requires employers with 20 or more employees (50 or more for non-profits) to make a minimum level of health care expenditure for employees performing at least eight hours of work per week within the City of San Francisco.

An employer is covered by the HCSO for any calendar quarter if it meets the following three conditions:

• Employs one or more workers within the geographic boundaries of the City and County of San Francisco;
• Is required to obtain a valid San Francisco business registration certificate pursuant to Article 12 of the Business and Tax Regulations Code; and
• Is a for-profit business with 20 or more persons performing work OR a nonprofit organization with 50 or more persons performing work.

The SF HCSO does not apply to employers who do not need to obtain a valid San Francisco business registration certificate.

Summary

HCAO

Effective July 1, 2024, covered employers who make payments to San Francisco General Hospital to satisfy the requirements of the HCAO must pay $6.75 per hour, capped at $270.00 per work week.

This rate is adjusted for inflation annually on July 1.

Most City contractors and tenants (including at the Airport and the Port) must offer health plan benefits to their covered employees, make payment to the Department of Public Health, or, under limited circumstances, make payments directly to their covered employees.

The Health Care Accountability Ordinance (HCAO) applies to most City contractors and tenants (including those at the San Francisco International Airport and the Port of San Francisco).

The HCAO requires employers to:

• Offer health plan benefits to their covered employees;
• Make payments to the city for use by the Department of Public Health; or
• Under limited circumstances, make payments directly to their covered employees.

HCSO

Complying with the City’s Employer Health Care Expenditure Requirements:

• The SF HCSO requires covered employers to make a specified amount of health care expenditures for covered employees per qualifying hour oof service performed for the employer;
• Employers generally satisfy the health care expenditures through a combination of payment of an employer share of the premium for qualifying health insurance, , making of employer HSA contributions, and/or payment of contributions to the City Option.
  • Aspects of the HCSO are not intuitive for employers—including the requirement to make City Option contributions for certain employees who decline the health plan, and the eight-hour per week covered employee threshold.

The HCSO generally requires employers with 20 or more employees (50 or more for non-profits) to make a minimum level of health care expenditures for employees performing at least eight hours of work per week in San Francisco:

Additional Resources

For more information, please see the San Francisco HCAO webpage or the San Francisco HCSO web page or the San Francisco City/County FAQ document.