For years, Rosanne worked for a restaurant that charged its customers extra for employee medical care. But employees never saw any of the money for this coverage, she says. Last October, they began asking questions.
In January, they got the answer. Their employer was funding a medical reimbursement account, under the Healthy San Francisco mandate, designed to repay workers up to $3,000 a year for certain medical expenses. Yet the account balances expired each December and then were reclaimed by the restaurant. Ultimately, Rosanne gave a co-worker some of her own money to help pay for urgent medical treatment.
“We had to pay $800 when she had $3,000 expire at the end of December,” said Rosanne, who provided neither her last name nor workplace when she spoke to the Small Business Commission last month.
Even businesses agree that aspects of Healthy S.F. must be reformed, but how to do so could be fiercely debated today by the Board of Supervisors.
San Francisco’s universal health coverage requires companies employing more than 20 people to either provide health care coverage or set aside money to provide an employee health care account.
Most employers insure their workers, but medical reimbursement accounts are another popular option.
Yet because account administration is not regulated, some employers restrict what types of care they pay for, and how often they zero out the accounts and reclaim the money. The City estimates that employers reclaim about 80 percent of such accounts.
Supervisor David Campos and six co-sponsors have proposed prohibiting employers from ever reclaiming the money and requiring them to cover specific medical expenses.
But many in the business community have balked at what San Francisco Chamber of Commerce President Steve Falk describes as the “sledgehammer” approach of legislation that he says could threaten some businesses.
Falk said his organization is working with Board of Supervisors President David Chiu and Mayor Ed Lee’s offices to propose amendments to Campos’ legislation.
Falk said businesses support requiring the accounts to cover more expenses, but want to be able to cap the accounts so there is never more than a year’s worth of money in the account.
Campos said such regulation would invite litigation since a federal court has ruled that The City cannot micromanage these accounts. He doesn’t agree that the legislation would be bad for business.
“I think that the independent reviews of San Francisco’s health care security program made it clear it hasn’t had that impact to business, because they pass the costs on to the consumer,” he said.
Businesses put out call to oppose plan
The business community is mobilizing around the amendments to San Francisco’s health security ordinance that it says will cost employers big.
The San Francisco Chamber of Commerce and Golden Gate Restaurant Association both organized visits to supervisors’ offices in recent days. Steve Lombardi, owner of Lombardi Sports, wrote other business owners decrying proposed legislation as “the most damaging piece of city hall ‘initiative’ that I have ever witnessed” and asking recipients to urge their supervisors to oppose it.
Some residents received “robo-calls” from the San Francisco Council of District Merchants Association claiming that the legislation “will triple the cost to small business to provide health care.” The call asked residents to ask Supervisor Scott Wiener to oppose the legislation.
One recipient was Ryszard Koprowski, who said the call inspired him to ask Wiener to support the legislation. Koprowski works part time for both the San Francisco Opera and San Francisco Ballet. Each provides him with medical reimbursement accounts, but only one covered the dental work he needed last year — and that account had expired.
“I’m doing the same work for both companies; one I’m covered and one I’m not,” he said. “It’s just weird to me.”
Healthy or wealthy?
Employers reclaim an average of 80 percent of medical reimbursement funds.
- 13: Percentage of employers who used medical reimbursement as their main method of complying with the Healthy S.F. ordinance in 2010
- $4,000: The maximum amount required to be placed in a medical reimbursement account each year, per the ordinance
- 20: Average percentage of medical reimbursement used annually
- 80: Average percentage reclaimed each year by employers
- $50 million: Amount reclaimed by employers
Source: Office of Labor and Standards Enforcement