The 9th U.S. Circuit Court of Appeals on Monday, March 9, declined to review a unanimous 2008 decision by a three-judge appeals panel upholding the legality of a San Francisco health care spending law. A San Francisco-area restaurant trade group that challenged the 2006 law, which went into effect last year, had asked for the full appeals court to review the panel’s decision.
A majority of the active members of the appeals court rejected the request for an en banc review. In a decision written by Judge William Fletcher, the appeals court again said the San Francisco law was not pre-empted by the Employee Retirement Income Security Act.
Fletcher also said that the San Francisco law was different from a Maryland law—overturned by the 4th U.S. Circuit Court of Appeals—that required large employers to spend a certain percentage of payroll on health care, or pay the difference to a fund used to provide coverage to the uninsured. As a result, there was no conflict at the appeals court level, he wrote. Fletcher also wrote the original appeals decision.
Under the law, employers with 100 or more employees must make health care expenditures in 2009 of at least $1.85 per hour for every eligible employee working at least eight hours a week, and employers with 20 to 99 employees must make health care expenditures of at least $1.23 per hour. Expenditures can include payment of group health insurance premiums, health savings accounts and health reimbursement arrangement contributions, or payments to San Francisco.
The case is being watched by employers nationwide who fear the San Francisco law could lead to a wave of new health care spending laws by other cities and states looking for ways to expand coverage.
That would result, benefit experts say, in both higher health care and administrative costs for employers, as they try to keep on top of new benefit mandate after benefit mandate, and would make it extremely difficult for multistate employers to offer uniform health care benefit plans.
Kevin Westlye, executive director of the Golden Gate Restaurant Association, said the group intends to seek U.S. Supreme Court review of the ruling by the 9th Circuit.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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