Feds Uphold San Fran Health Care Program

Sacramento, California, has been the center of much contention about health care reform. One aspect in particular has not only come under fire in the press but also has been the subject of litigation spearheaded by restaurants in the area.

Gov. Schwarzenegger's plan requires a level of financial participation from employers heretofore unseen in the state. As is usual when people or groups are asked to pay more, the reaction was far from positive. A court battle rapidly ensued as the restaurant association asserted that the payment structuring and financial participation demanded of their industry was in violation of federal law.

It would seem that the judges do not concur. Marc Lifsher of The LA Times reports:

Ruling on a suit brought by a local restaurant association, a three-judge panel of the U.S. 9th Circuit Court of Appeals found that fees charged to employers under the 10-month-old San Francisco Health Care Security Ordinance do not violate federal laws regulating employee benefit programs.

The San Francisco ordinance, which took effect Jan. 9, requires for-profit employers with 20 or more workers to offer health insurance, set aside funds in health reimbursement accounts or pay a fee to the city's Healthy San Francisco program. Nonprofit employers with 50 or more staffers are also covered.

While this news is not greeted with any joy on the part of restaurant owners, supporters of the plan, Healthy San Francisco, see it as proof that through shared responsibility the current health care crisis can be met and vanquished.

"Today's ruling is a huge victory for the city and for the 46 million Americans who don't have health insurance," [San Francisco Mayor Gavin] Newsom said. "San Francisco is proving that it can be done. By thinking outside the box, every city and state in this country can provide health insurance if they are willing to challenge the conventional wisdom."

In the short ten months the plan has been in place, basic medical care has been extended to 30,000 San Francisco residents that lack insurance. A good beginning, but only time will tell the full impact on not only health care but also the local economy and the businesses that make it up. Another process that I would classify as well worth watching.

SOURCE: "Federal court upholds San Francisco healthcare program" 09/30/08
photo courtesy of paraflyer, used under its Creative Commons license

San Francisco Health Insurance Mandate gets Green Light from 9th Circuit Court

The Ninth Circuit Court of Appeals is allowing the City of San Francisco to move forward with its new health care plan despite the recent ruling of the U.S. Federal District Court. A few weeks ago Judge Jeffrey White ruled that the funding component of the plan violated The Employee Retirement Income Security Act of 1974 (ERISA)

Bob Egelko at the San Francisco Chronicle offers a simple summation in his analysis of the situation:

That provision requires large and medium-size companies to offer insurance to their employees or pay a fee to the city for the cost of their coverage. The court said the city probably would win its argument that U.S. District Judge Jeffrey White was wrong when he ruled Dec. 26 that local governments lack the power to force employers to contribute to a health care program. [...]

The law was challenged by the Golden Gate Restaurant Association, which represents more than 900 Bay Area establishments. Dan Scherotter, the association's incoming president, said the restaurants were disappointed but would comply with the ruling and remained confident of winning after the court hears all the evidence.

Avoidable suffering was cited by Judge Williams Fletcher as a reason for the 3-0 decision. According to Egelko's article the case has been prioritized and final written arguments are due this April with a possible decision this year.

For more detail on this topic I would advise reading the primer on the case posted yesterday on the Alan Katz Health Care Reform Blog. As usual Mr. Katz included a number of useful sources including a link to the actual court decision and some thoughts concerning the ramifications of this decision for California's proposed statewide health care plan (ABX1-1).

ABX1-1 and its companion ballot initiative create a similar funding mechanism at the state level. Opponents of the legislation claim it, too, violates ERISA. This decision undermines the argument of those critics.

Or as Speaker Nunez put it in a statement issued by his office today, in what can be considered the political equivalent of a running back's victory dance in the end zone, "Opponents of health care reform now have one less rubber arrow in their quiver as they try to stop our historic effort to fix the broken system and make health care more affordable and accessible to the people of California."

Only time will tell what impact the precedents set in this case will have on the reform of health care across the nation. One thing is certain: no matter what the final decision is, it will have a far-reaching ripple effect.

SOURCE: "Ninth Circuit Allows SF Health Plan to Go Forward" 01/09/08
SOURCE: "Appeals court allows S.F. to enforce health care law" 10/10/08
photo courtesy of tinkerroll21, used under this Creative Commons license

Federal Judge Says "No" To Employer Mandates in San Francisco

The gavel has fallen.

Today a United States federal judge has struck down a basic component of the ambitious San Francisco health care plan. The court ruled that employers cannot legally be forced to subsidize the plan. Lisa Leff of the Associated Press brings us the details:

U.S. District Judge Jeffrey White ruled Wednesday that the mandate, set to take effect on Jan. 1, would violate a 1974 federal law requiring consistency in the health coverage afforded employees who work for the same company but live in different jurisdictions.

"By mandating employee health benefit structures and administration, those requirements interfere with preserving employer autonomy over whether and how to provide employee health coverage, and ensuring uniform national regulation of such coverage," White wrote.

The ruling came in a lawsuit brought by the Golden Gate Restaurant Association, which argued that the mandatory contributions the city sought placed a costly burden on members already struggling to make a profit.

Healthy San Francisco, as the plan is called, was developed to provide access to health care for the city's poorest. The goal is to give 82,000 people access to clinics and medical services no matter what their employment or immigration status is. At this point 6,500 people are signed up for the program which began last July.

The estimated financial outlay for the plan is $200 million per year. To offset the expense city officials passed a law stating that:

Companies with 20 or more workers to spend at least $1.17 per hour toward each employee's health care. Those with more than 100 workers would have to pay $1.76 per hour up to a monthly maximum of $180 per worker.

Whichever way the appeal goes, this is going to be a very important case to watch for all of us who are concerned with the path of universal health care in the United States.

SOURCE: "Part of S.F. Health Care Plan Tossed Out" 12/27/07
photo courtesy of Brymo