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San Francisco
Health care Security Ordinance
UPDATE (2)
Employer Spending
Requirement Struck Down:
Federal District Court in San Francisco rules that the Health Care
Security Ordinance “fails to withstand the expansive test of ERISA
preemption.”
The San Francisco Health Care Security Ordinance, which required that
employers meet minimum spending requirements in providing health care to
employees, was overturned by the Federal District Court effective
December 26, 2007. After hearing evidence in the suit brought by the
Golden Gate Restaurant Association on November 2, the court determined
that “By mandating employee health benefit structures and
administration… [the Ordinance] interferes with preserving employer
autonomy over… coverage, and ensuring uniform national regulation of
such coverage.”
The court found that the Ordinance would interfere with ERISA in several
key areas:
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By regulating the level of
benefits provided by mandating a minimum spending level that would
affect the structure of existing ERISA health plans.
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By imposing recordkeeping
and other administrative requirements that would affect the
administration of ERISA health plans.
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By imposing local
requirements that would interfere with nationally uniform plan design
and administration.
The court ruling prevents
the employer spending requirement from going into effect. The City is
appealing the ruling and is evaluating how this ruling will
affect the roll out of the Healthy San Francisco coverage program for
uninsured residents.
For More Information:
This document is not intended to provide any legal advice or analysis. Please
consult your own legal counsel for further information on the topics discussed in this
issue of Insight.
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