Workers in San Francisco could have more money for medical bills under a proposal to close a loophole in The City’s landmark health care program, but the plan is drawing criticism from business leaders.
The effort to close the loophole was revived Tuesday by Supervisor David Campos. Earlier this year, a study found that $50.1 million, or 80 percent, of money employers set aside in health reimbursement accounts in 2010 was not used by workers and went back to the companies.
San Francisco’s health care law requires businesses with more than 20 workers to spend a certain amount per employee on health costs. Employers can choose different ways to meet this mandate, including setting up reimbursement accounts.
Campos introduced legislation Tuesday that would prevent employers from taking back the money in the accounts each year and instead have the funds accumulate.
"We in San Francisco are proud of the fact that we have led the way on [health care]," Campos said. "Closing this loophole is important to make sure that we can truly have meaningful universal health care."
In August, a battle over similar legislation erupted at the Board of Supervisors, with business advocates strongly opposing the proposal. Campos withdrew the legislation after realizing he didn’t have support for it as proposed.
But the renewed effort was not welcome news for business advocates, who say Campos has refused to listen to them to arrive at a compromise.
"It will be the largest tax-fee burden on the business community in at least 40 years," said Rob Black, executive director of the Golden Gate Restaurant Association, an advocacy group for restaurants. Black said there are other ways to address the issue, including requiring notification of the benefits and capping the funds in an account at a year’s value.
The legislation is supported by Campos and five other supervisors — Jane Kim, John Avalos, Eric Mar, Ross Mirkarimi and Malia Cohen. It takes six votes to approve legislation, but eight votes to override a mayoral veto. The proposal is supported by the San Francisco Labor Council.
If the legislation is approved as is, the San Francisco Chamber of Commerce’s Jim Lazarus, vice president of public policy, said the organization would "urge the mayor to veto."
"It’s not affordable for many small businesses," Lazarus said.
It would be Lee’s first veto since becoming mayor in January.
Mayor Ed Lee would not comment on the specific legislation, not having seen the details. Lee’s spokeswoman Christine Falvey said the mayor "looks forward to working with the board to fine-tune a solution to a very real problem."
The following shows which supervisors are and are not sponsoring Supervisor David Campos’ legislation:
Source: Supervisor David Campos