Small Business Commission may call for task force study of Ammiano worker health care proposal

By Pat Murphy

December 13, 2005

Business representatives last night derided a worker health care proposal before the San Francisco Small Business Commission, citing the proposal as premature.

At its next meeting, the commission will vote whether to ask a task force be formed to study the issue.

Passage of that request seems certain as commissioners last night voiced skepticism toward the proposal.

Supervisor Tom Ammiano announced the plan on November 22, which would require businesses with 20 or more workers to provide employee health care coverage.

Supervisors Chris Daly, Sophie Maxwell, and Ross Mirkarimi back the Ammiano measure. A hearing on the issues has not yet been held by a Board of Supervisors committee.

If the ordinance is approved, some 500 to 800 businesses would be affected, according to Ammiano's office. The District 9 supervisor also pointed to a large number of small businesses already providing health coverage.

The ordinance would affect more than 500 to 800 businesses, a spokesman for the Golden Gate Restaurant Association said last night, and could force job cutbacks at businesses currently providing health insurance.

"Almost all of our members provide their fulltime employees with health care. Just a quick phone survey shows that the average is around $225-$235 per employee for medical, vision, and dental.

"The differential between that and the $345…plus the fee to manage the program will cost them more than an additional $100.

"These are the restaurant managers, the restaurant owners who are doing the right thing currently. They're buying their medical insurance in the open market at a price far below what the city and county is proposing, and yet they would be responsible to spend up to the difference.

"So I think it's real important that we look at not 500 or 600 businesses but, because of the differential in this ordinance, it will affect thousands of restaurants and thousands of other small businesses.

"The second thing that we're very concerned with is our industry is built upon part time employees.

"They go to school, they're graduate students, they're college students, they're high school students, and they can't afford to work full time.

"If you position small business to be required to provide $345 a month health care they will eliminate jobs and consolidate jobs down to fulltime jobs in order to stay in business.

"The average restaurant, according to a survey which is published on our website, makes about four percent profit.

"The average for a good sized restaurant is about $80,000. This ordinance would cost about $186,000 - they're going to go upside down.

"Restaurants are smart. They will do what they have to do to survive. They will eliminate jobs.

"I think given the crime wave in our city, given the fact we need employment for our youth, and in trying to encourage families to stay, every piece of legislation we do should encourage job growth not discourage it," Westyle suggested.

He urged review of the Public Health Department costs are part of broader overview.

"One area that has not been talked about is the Department of Health's budget of more than $1 billion a year to provide health care to 800,000 San Franciscans.

"We encourage the mayor to follow through and do an audit of the Department of Public Health and find out how we're spending existing money before we extract more money from small business," added Westlye.

A spokesman for the San Francisco Chamber of Commerce called for an all-stakeholder task force.

"We have legislation that lays out a requirement, a mandate, on all employers of 20 or more employees - small businesses as well as large - and it puts on a tail-end short study that will then somehow tell us how to implement this.

"There needs to be a task force formed by the mayor, supervisors, with members of this commission, with members of the health commission, with members of local neighborhood business associations, downtown business associations, and the ethnic chambers of the city," said Lazarus.

Commissioner Michael O'Connor recommended a resolution calling for a task force be considered at the next commission meeting.

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