- The San Francisco Health Care Security Ordinance (HCSO) requires covered employers to spend a minimum amount of money, called an Expenditure, each calendar quarter on their employees’ healthcare.
- The minimum Expenditure will increase to $3.18 per hour for “large employers” starting January 1, 2021.
- The minimum Expenditure will increase to $2.12 per hour for “medium employers” starting January 1, 2021.
- The minimum Expenditure does not apply to managers, supervisors, and confidential employees (as defined) that earn more than a designated amount, as determined annually. The 2021 amounts have not yet been announced.
2021 Employer Health Care Expenditure
The San Francisco Health Care Security Ordinance (HCSO) requires covered employers to pay a certain amount – a Health Care Expenditure (Expenditure) – toward their covered employees’ healthcare costs. See this EPIC article for an overview of the HCSO
The HCSO Expenditure rate is subject to change each January 1. The Expenditure does not apply to certain managerial, supervisory and confidential employees if their annual salary exceeds a designated amount, which is also subject to change each January 1.
The chart below compares the applicable 2021 and 2020 dollar amounts.
EMPLOYER HEALTH CARE EXPENDITURE RATES
Business Size (Company Wide)
|Large (100+ Employees)||$3.18 /hour||$3.08/hour|
|Medium (20-99 Employees)*||$2.12 /hour||$2.05/hour|
|Small (1-19 Employees)||Not applicable; exempt from requirement|
|*Nonprofits with fewer than 50 employees are exempt from the Expenditure requirement.|
ANNUAL SALARY EXEMPTION
Business Size (Company Wide)
|Managers/Supervisors/Confidential Employees (defined by regulation)||TBD||$104,761 (or $50.37 per hour)|
Steps for Covered Employers
Covered employers can ensure compliance with the HCSO as follows:
- Comply with the special calculation methods for self-funded plans, if applicable.
- Make required health care Expenditures on behalf of covered employees.
- Submit quarterly payments for the San Francisco “City Option” (if required) and notify affected employees of such payments.
- Maintain records sufficient to establish compliance with the Expenditure requirement.
- Post the required HCSO notice in all San Francisco
- Submit an Annual Reporting Form to the San Francisco Office of Labor Standards Enforcement (OLSE) annually by April 30th (reports for 2019 canceled due to COVID-19 public emergency).
- Audit internal processes for tracking hours worked, recordkeeping, submitting quarterly payments (if required), and reporting.
- If obtaining annual waivers of coverage, use only the SF HCSO waiver form.
- Sign up on the OLSE email list to receive updates regarding the annual ESR, notices, forms, deadlines, and other important news.
- Refer to the HCSO website for the most current guidance, information and forms.
EPIC Employee Benefits Compliance Services
For further information on this or any other topics, please contact your EPIC consulting team.
EPIC offers this material for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.
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