Law in limbo: A San Francisco law requiring employers to either provide
health benefits or pay into a city-run health care fund remains in legal limbo
after a series of federal judges issued contradictory opinions on the program’s
legality. The first decision came in December when U.S. District Judge Jeffrey
White said the city’s law violated the Employee Retirement Income Security Act.
Like a similar law struck down in Maryland in 2006, the San Francisco law would
inhibit employers from managing health benefits nationally, a key provision of
ERISA, White said.
But a three-judge panel on the 9th Circuit Court of Appeals, which met to
address the city’s request for an emergency stay of White’s decision, signaled
in an opinion issued January 3 that states and local governments have leeway to
pass laws protecting the health and welfare of their residents in the absence of
similar national laws. The panel has not yet ruled on whether it would grant a
stay.
The program, called Healthy San Francisco, would have required San Francisco
employers with 20 or more employees and nonprofits with at least 50 employees to
provide health benefits or pay a fee to support the city health program, which
was designed to insure the city’s 82,000 uninsured adult residents at an annual
cost of $200 million. The city launched a scaled-back version of its insurance
program this month. The ruling by White, if it is not overturned, could dampen
the efforts of the state Legislature to pass a similar bill requiring employers
to pay a health care fee.
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