Legal Fight Against San Francisco's Health Plan Heats Up

Many groups are closely watching Golden Gate Restaurant Association v. City and County of San Francisco, a lawsuit now before the 9th U.S. Circuit Court of Appeals that challenges the city's Healthy San Francisco program. One of the latest heavy hitters to step into the case is the Small Business Legal Center of the National Federation of Independent Business, which filed an amicus brief March 26 opposing the program's employer mandate: Private employers with more than 20 employees must pay at least $1.17 per hour per covered worker toward employees' health care or pay a fee based on the number of employees and hours worked to the city. A hearing before the appeals court is set for April 17; the court on Jan. 9 allowed the program to proceed by staying a lower court's order that found the program unconstitutional.

The brief asks the court to strike down the city's ordinance because it is unconstitutional and preempted by the Employee Retirement Income Security Act. "Forcing employers to pay for health care benefits they simply can't afford is not the solution to our nation's health care crisis," said Karen Harned, executive director of the Small Business Legal Center. "Due to the employer mandate included in San Francisco's Health Care Security Ordinance, this law poses an unconstitutional burden on interstate commerce and will unjustly harm business owners in San Francisco. The ordinance also violates ERISA's preemption provision, which prohibits state and local laws from interfering with employer-sponsored health and welfare plans. For these reasons, NFIB strongly believes that San Francisco's Health Care Security Ordinance should be invalidated."

The Kaiser Commission on Medicaid and the Uninsured, part of the Kaiser Family Foundation, issued a brief report on the program March 13 that said the city's plan had enrolled more than 13,000 uninsured residents by Feb. 25, 2008, and city officials hope to enroll 30,000 in the first year. Massachusetts and Vermont enacted laws that impose employer mandates to pay some or all of health insurance coverage costs for their workers, but their laws were not challenged on ERISA grounds; San Francisco also went beyond other cities' health care service access programs by providing services for all uninsured residents, the report states. For both reasons, the ruling in the appeal will be significant, the commission noted.

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