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San Francisco health benefits mandate challenged


SAN FRANCISCO--The Golden Gate Restaurant Assn. is challenging a health benefit mandate passed by the city of San Francisco last summer.

In a motion filed Wednesday in U.S. District Court in San Francisco, the organization charged that San Francisco's Health Access Program violates the Employee Retirement Income Security Act, which precludes state and local governments from imposing benefit mandates on self-insured employers.

The ordinance, which was signed into law last August and is slated to take effect July 1, 2007, requires employers with 50 or more employees to pay a fee for each hour an employee works into a fund that would be used to pay for their health care. By 2008, smaller firms with between 20 and 49 workers also would be required to make the contributions. Employers already offering health care coverage but not spending at the minimum level would be required to contribute the difference to the new city program.

"GGRA strongly supports expanding health care coverage for all San Franciscans, but we need a reasonable plan that doesn't run afoul of federal laws and doesn't place an unfair financial burden on employers," said Kevin Westlye, the organization's executive director, in a statement.

"Not only does the city's law violate federal statutes, but the onerous cost it imposes will hurt many small businesses and damage our local economy," his statement continued. "It is illegal for individual municipalities to mandate that employers pay for health insurance."

If it withstands the ERISA challenge, all uninsured residents of the city of San Francisco--including illegal immigrants--will be eligible to participate in the new program, which would only provide coverage within city limits. Since 1989, San Francisco law has banned city workers from asking the immigration status of any applicant seeking city services.

The GGRA is a restaurant industry trade organization with more than 800 employer members in the San Francisco Bay area.