2009 HEALTH CARE EXPENDITURE RATES UNDER HEALTH CARE SECURITY ORDINANCE

Businesses with employees who work in San Francisco (but who are not necessarily based in San Francisco), and that are subject to the Health Care Security Ordinance ("HCSO"), must make health care expenditures on behalf of employees who are covered by the San Francisco legislation.

As of January 1, 2009, the amount of contribution increases from $1.76 per hour to $1.85 per hour for companies with more than 100 employees. On the same date, the contribution for companies with 20 to 99 employees increases from $1.17 per hour to $1.23 per hour.

Managers, supervisors and confidential employees are exempt from the HCSO if they meet the definitions for the exempt categories of employees and they meet the salary exemption. As of January 1, 2009, the salary exemption has been increased from $76,851 per year to $80,397 per year, or $36.85 per hour.

The HCSO went into effect in January 2008, but has been challenged in federal court by the Golden Gate Restaurant Association. Recently, a three-judge panel of the Ninth Circuit Court of Appeals rejected the Restaurant Association's challenge and ruled that the ordinance does not violate ERISA. The Restaurant Association has petitioned for a hearing en banc. Until the Ninth Circuit decides whether to rehear this issue, and to reinstitute an injunction, the HCSO remains the law in San Francisco.