Supreme Court rejects restaurant group bid
to suspend City health care mandate

By Julia Cheever

February 22, 2008

A bid by a restaurant owners' group to halt a mandate for businesses to help pay for the city of San Francisco's health plan was turned down by a U.S. Supreme Court justice yesterday.

Justice Anthony Kennedy declined to grant the Golden Gate Restaurant Association's request for suspension of the employer spending mandate until an appeal is completed.

Justice Anthony Kennedy
Photo courtesy Academy of Achievement

The employer contributions are intended to pay for part of the city's pioneering Healthy San Francisco Program, aimed at providing health care for 73,000 uninsured residents. Other funding is from city, state and federal governments.

Kennedy's action may make little immediate difference, because the contribution requirement doesn't kick in until April 30 in the case of businesses with more than 50 workers and July 30 for employers with 20 to 49 workers.

A federal appeals court in San Francisco is scheduled to hold a hearing on April 17 on an underlying lawsuit in which the restaurant group is challenging the spending requirement.

The panel is expected to rule quickly, possibly by the April 30 spending deadline.

Matt Dorsey, a spokesman for San Francisco City Attorney Dennis Herrera, said, "We're pleased with Justice Kennedy's order but at same time not especially surprised. We saw no irreparable harm to the employers."

The employer spending is expected to contribute about $12 million of the annual $200 million cost of the health program when it is fully implemented in two years.

Businesses with 20 or more employees are required to spend a set amount per worker on either their own health insurance program or payments to the city. Those with 50 or more workers must spend $1.76 per hour and those with 20 to 49 employees must spend $1.17 per hour.

In previous court proceedings, U.S. District Judge Jeffrey White ruled in December that the employer spending requirement violates a U.S. law that regulates employee benefit plans.

But in January, a panel of the 9th U.S. Circuit Court of Appeals issued an emergency stay allowing the city to go ahead with implementing the requirement while it appeals the trial court ruling.

The restaurant group's unsuccessful petition to Kennedy asked for a suspension of that stay. A spokesman for the group was not immediately available for comment.

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