Since 2008, the city and county of San Francisco, California have required most employers to either provide health coverage, pay an employee’s actual health care expenses or make payments to the Healthy San Francisco program. For the 2022 calendar year, there are several changes employers need to be aware of.
1. Self-Funded Plan Top-Off Due by February 28, 2022.
Employers that use a self-funded medical, dental and/or vision plans to comply with this ordinance must calculate the actual value of their plans. If they are underpaying, then they must make top-off payments to employees. Calculation instructions are available on the HCSO webpage.
Employers that are new to these calculations or would like a refresher, can attend a webinar on February 7, 2022, at 10 a.m. PST. You can register here. The webinar will be recorded and can be reviewed later. The attendee password is hcso.
2. Annual Reporting Due by May 2, 2022.
The Annual Reporting for the HCSO program for the 2021 plan year is due by May 2 (normally April 30). This requirement was waived during 2019 and 2020 due to COVID but is required for 2021. Forms will be available by April 1, 2022, on the HSCO website.
3. New HCSO Notice for 2022.
Employers are required to post a notice on the HCSO program at each job site or workplace. This can be emailed to remote workers. The new poster is available on the HCSO website.
4. New HCSO Rates Effective January 1, 2022.
Under this ordinance, employers must spend a minimum amount on health care for their employees that work in the city or county of San Francisco. The new rates effective January 1, 2022 are:
- $3.30 per hour for employers with 100 or more workers worldwide (was $3.18 in 2021); and
- $2.20 per hour for employers with 20-99 workers worldwide (was $2.12 in 2021).
The San Francisco HSCO applies to all businesses with 20 or more employees and all nonprofits with 50 or more employees. The employee count is regardless of the location of the headquarters or main work sites. If even one employee works in the city or county of San Francisco, then HCSO applies. Covered employers are required to provide at least an amount called the spending requirement for their impacted employees. The spending requirement is an hourly dollar amount based on the number of hours that the employee works within the city and county of San Francisco. The hourly total includes paid time off (PTO) and paid holidays and are capped at 172 hours per month or 516 hours per quarter.
The spending requirement does not apply to the following employees:
- New hires during their first 90 days of employment;
- Employees who worked fewer than eight hours per week, as averaged over the calendar quarter;
- Certain managerial, supervisory and confidential employees who earn more than $107,991 annually or $51.92 per hour ($109,643 annually or $52.71 per hour effective January 1, 2022);
- Trainees of a nonprofit for up to one year while in a bona fide training program consistent with federal law;
- Employees who are eligible for Medicare or are TRICARE beneficiaries;
- Employees who receive health care benefits under the San Francisco Health Care Accountability Ordinance (HCAO); and
- Employees who have signed a Voluntary Waiver Form.
Employer requirements include:
- Satisfy the employer spending requirement by making required health care expenditures on a quarterly basis on behalf of the covered employees;
- Maintain records to prove compliance;
- Post or distribute the 2022 HCSO Poster so that covered employees are aware of the program; and
- Submit an Annual Report to the Office of Labor Standards Enforcement (OLSE) by April 30 of each year (or following Monday if the 30 is on a weekend).
If you have remaining questions about whether or not this update applies to your organization, Alera Group has published a San Francisco HSCO overview guide that can be downloaded here.
If you would like additional information, contact your Alera Group representative or email us at email@example.com to be connected with an expert near you.
The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as ﬁnancial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.
This article was last reviewed and up to date as of 02/02/22.