A city ordinance requiring employers to foot the bill for employee health care or help fund the Healthy San Francisco program may see some amendments before it begins on Jan. 1, 2008.

U.S. District Judge Jeffrey White is set to rule on a lawsuit filed by the Golden Gate Restaurant Association against the city on grounds that a 1974 federal law, the Employee Retirement Income Security Act, prohibits state and local governments from regulating employee benefits. Judge White heard the lawsuit on Nov. 2.

“I think it’s really an elitist piece of nuisance litigation,” said Supervisor Tom Ammiano, who drafted the Health Care Security Ordinance (HCSO). “They’re [GGRA] fighting the inevitable.”

Kevin Westlye, executive director of the GGRA said, “This puts an industry upside down.”

Westlye said Judge White can make his ruling any day now.

Westlye added the GGRA is a proponent of the Healthy San Francisco mandate and that his organization is challenging only the employer mandated health care portion of the ordinance. Currently health care is provided for full-time restaurant employees, Westlye said.

The GGRA is concerned about paying for health care for part-time and seasonal employees, whom along with full-time employees, will cost restaurants more money than they earn.

“The problem is about affordability and small business can’t afford the Healthy San Francisco mandate,” Westlye said.

The HCSO, signed by Mayor Gavin Newsom in August 2006, mandates that employers fulfill a quarterly health care expenditure by providing health insurance for employees, or by making payments to fund Healthy San Francisco. Healthy San Francisco launched on July 2 and offers a variety of services such as preventative, emergency, and mental health care for uninsured residents within city limits, but does not provide vision or dental care, according to the official Web site. The program is available to all residents “regardless of immigration status, employment status, or pre-existing medical conditions,” the Web site said.

“Whether or not San Francisco employers contribute to the program, it will continue. It may, of course, be adjusted to bring people in more slowly than we wanted to,” said Bob Menezes, Director of Marketing & Communications of Healthy San Francisco.

To meet their health care expenditure, businesses with 20 or more employees are required to contribute $1.17 to $1.76 for each hour worked for each covered employee. The ordinance is effective Jan. 1, 2008 for employers with over 50 employees, and April 1, 2008 for employers with 20 to 49 employees.

Non-profits with less than 50 employees and businesses with less than 20 employees are exempt.
Under those restrictions, employees are eligible for coverage after the first 90 days of employment and if they work 10 hours per week.

“We are moving forward as if we won the lawsuit,” Menezes said.

“If [GGRA] loses the lawsuit, we have to have a system in place and bill employees, and if the judge made a decision in December, there would be no time to do it. It’s the only way we can be prepared for it.”

Dylan Coyle, a master’s student in music history, said that he supports the ordinance because businesses sometimes try to avoid providing benefits.

“I think that hiring employees part time is a loophole [for employers] to get around providing health care and other benefits,” said Coyle, 25.

Hannah Pult, 30, would benefit from the ordinance as a part time employee if she lived in San Francisco, but sees both sides of the issue.

“I think it’s a good idea. I don’t have health insurance,” said Pult, 30, who is in the teacher credential program. “I can see maybe a distinction between part time and full time employees, and I can see the side of the employers. It’s a complicated issue.”