BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

HRA usage gains ground despite San Francisco restrictions


A San Francisco law restricting health reimbursement arrangements hasn't deterred employers from using HRAs to meet requirements in the city's health care spending law, according to an analysis.

Under the city's 2006 health care spending law, employers with 100 or more employees are required to spend $2.33 per hour per covered employee on health care this year, while employers with 20 to 99 employees must spend $1.55 per hour. Employers with less than 20 employees are exempt from the requirement.

The overwhelming majority of employers satisfy the requirement by paying group insurance premiums. However, the law also allows employers to contribute the required amounts to HRAs, which reimburse employees for health care expenses.

While employers had been able to design their HRAs so that unused funds reverted to them at the end of the year, the San Francisco Board of Supervisors amended the law in late 2011. The change required that HRAs be available to employees for 24 months after the contribution. For terminating employees, an account balance has to be available for 90 days after the employee leaves.

Those changes, which took effect Jan. 1, 2012, were triggered by a June 2011 report by the city's Office of Labor Standards Enforcement, which found that just 20% of the $62 million allocated to HRAs in 2010 was reimbursed to employees.


However, even with the new restrictions on HRAs, more employers are utilizing the arrangements to satisfy the spending law requirements, according to report last week by the San Francisco Office of Labor Standards Enforcement.

In 2012, 23.7% of employers used HRAs to satisfy the spending law for at least some of their San Francisco employees, up from 20.7% in 2011.

Also in 2012, nearly 25% of the $107 million employers contributed to HRAs was returned to employees to reimburse their health care expenses, up from 17% of the nearly $66 million contributed to HRAs in 2011, according to the recent report.

How much longer employers will be able to use HRAs to satisfy the San Francisco health care spending law is in doubt, however.

That is because stand-alone HRAs will not be allowed under the Patient Protection and Affordable Care Act effective next year. Stand-alone HRAs ran afoul of reform law provisions that bar plans from imposing annual and lifetime dollar limits.

In August, San Francisco Mayor Edwin Lee established a task force to examine the issue and to provide guidance to employers on how the San Francisco spending law can be integrated with PPACA.

Read Next

  • San Francisco to work on integrating its health care law with PPACA

    San Francisco Mayor Edwin Lee has re-established the task force whose recommendations years ago became the basis of the city's landmark 2008 health care spending law to develop guidance for employers on how the statute will integrate with the federal health care reform law.