By Julia Cheever
April 17, 2008
A federal appeals court is now pondering the legality of a San Francisco measure requiring employers to help pay for the city’s pioneering universal health care program.
Three judges of the 9th U.S. Circuit Court of Appeals heard arguments on the case in Pasadena today and will issue a written ruling at a later date.
The panel has no deadline, but the Golden Gate Restaurant Association, a local business group that challenged the measure, said it is hoping for a decision within several weeks.
Ken Jacobs, a labor expert at the University of California, Berkeley, who advised San Francisco on the development of the plan, said, “States around the country are watching this case very closely.”
Jacobs said, “The lack of clarity in the law has been a major impediment to health care reform. If San Francisco succeeds, it will open the door to reform efforts that could get millions of more people access to health care.”
The city’s program, known as Healthy San Francisco, is aimed at providing health care for the 73,000 uninsured residents who aren’t covered by other government programs.
Part of the funding — about $12 million of an estimated $200 million per year — is to come from companies with 20 or more workers.
Employers must either set up a health plan or contribute a set amount per worker to the city program.
The restaurant association, supported by the U.S. Department of Labor and the U.S. Chamber of Commerce, contends the employer spending mandate violates a federal law that puts regulation of worker benefit plans in the hands of federal rather than local government.
The Labor Department argued in papers filed with the court that allowing local employer requirements could open businesses up to “a potentially bewildering and conflicting array of mandates.”
Several union groups claim the city measure doesn’t conflict with the U.S. law because employers have a choice of either establishing a federally regulated health plan or paying a fee to the city.
The appeal heard today is technically the city’s appeal of a ruling in which a U.S. district judge in December overturned the employer spending requirement.
But because the appeals court issued an emergency stay of the lower court ruling on Jan. 9, the mandate has remained on the books.
Companies with 50 or more workers have until April 30 to make their first payment, however, and smaller firms have until June 30.
The three-judge panel that issued the stay, made up of Circuit Judges William Fletcher, Stephen Reinhardt and Alfred Goodwin, is the same panel that heard arguments on the full appeal today.
The judges wrote in the January stay ruling that the city had “a strong likelihood” of winning the full appeal. Their eventual ruling can be appealed to an expanded 11-judge panel of the appeals court or to the U.S. Supreme Court.
San Francisco Health Department spokeswoman Frances Cult said 17,798 city residents have enrolled in the health access program thus far.
The measure requires businesses with 20 to 99 workers to spend $1.17 per hour per employee and those with staffs of more than 100 to spend $1.76 per hour on health care plans or payments to the city.
Other funding for the program is provided by city, state and local governments and a sliding fee for patients.
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