SF HCSO Annual Employer Reporting is Back
After being waived in 2019 and 2020 due to the pandemic, the San Francisco Health Care Security Ordinance (HCSO) annual employer reporting is back in effect. Employers must report on their 2021 HCSO compliance by May 2, 2022.
If your organization is in San Francisco, you may have certain obligations to your employees under the Health Care Security Ordinance (HCSO). The HCSO can apply to an employer even if only one employee performs work in San Francisco.
Employers are bound by the HCSO based on the total number of employees in all locations throughout the world, not only in San Francisco:
- For-profit employers: 20+ persons performing work per quarter
- Nonprofit employers: 50+ persons performing work per quarter
Are you a covered employer?
HSCO applies to your organization if you meet the following three conditions during any calendar quarter:
- Employ one or more workers within the geographic boundaries of the City and County of San Francisco;
- Are required to obtain a valid San Francisco business registration certificate; and
- Are a for-profit business with 20 or more employees or a non-profit with 50 or more (the employee count includes all employees whether or not they work in the city)
In July 2021, San Francisco amended the ordinance to address telework during health order restrictions.
Expenditure Rates for 2021
HCSO includes financial compliance around an Employer Spending Requirement. Minimum health expenditures are required on behalf of all covered employees (those who’ve been employed for more than 90 days and regularly work at least 8 hours per week in SF).
The rates vary by your company size:
- Large Employers: 100+ employees: $3.18 per hour payable
- Medium Employers
- For Profit w/ 20-99 employees: $2.12 per hour payable
- Non-Profit w/50-99 employees: $2.20 per hour payable
- 2021 Exemption Threshold: managerial, supervisory, and confidential employees who earn more than $107,991 annually (or $51.92 per hour) are exempt.
Businesses with fewer than 19 employees and nonprofits with fewer than 49 employees are exempt.
NOTES: On August 6, 2021, San Francisco announced the expenditure rates for 2022. For 2022, the new exemption threshold will be $109,643 per year (or $52.71 per hour).
While employer reporting requirements were canceled for 2019 and 2020 due to the public health emergency, the quarterly employer spending requirement remained in place.
In addition to providing your covered San Francisco employees a minimum irrevocable benefit, to remain compliant with the HCSO you must:
- Maintain sufficient records that establish your compliance with the spending requirement
- Post the 2022 HCSO Notice in all workplaces with covered employees
- Submit an Annual Reporting Form to the San Francisco Office of Labor Standards Enforcement
Getting the Rates Right
When it comes to calculating your compliance with the spending requirement, things can get tricky. You’ll want to be sure that the total cost of the medical, dental, and vision benefits you offer is greater than or equal to the appropriate expenditure rate for your company size multiplied by an employee’s payable hours for that month or the max payable hour calculation of 172 hours.
Things you can include in the calculation of a minimum irrevocable benefit include:
- Medical premiums
- Dental premiums
- Vision premiums
- Health Savings Account, Medical Savings Account, or other irrevocable reimbursement accounts.
- Contributions to the City Option
If you’re unsure whether you’re a covered employer or if your benefits are compliant with HCSO expenditures, contact us at Lumity and we’ll do an audit of your rates.