Are you Compliant with SF HCSO?
If you have a business in San Francisco, you have certain obligations to your employees under the Health Care Security Ordinance. Much like the federal Affordable Care Act, there are rules you have to follow depending on your company size with regard to the benefits you provide as part of your total compensation package.
Generally, the City of San Francisco wants companies to provide a minimum irrevocable health benefit for their covered (working in San Francisco) employees. Irrevocable in this case meaning a benefit you can’t take away and claim ownership of depending on how your employees use it, like a Health Reimbursement Arrangement for example.
Are you a covered employer?
You are 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
- Are a for-profit business with 20 or more employees or a non-profit with 50 or more. (This includes all employees whether they work in or out of the city)
Expenditure Rates in 2017
SF HCSO includes financial compliance around an Employer Spending Requirement by assigning a minimum health expenditures 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, which vary by your company size are below:
- Large Employers
100+ employees $2.64 per hour payable
- Medium Employers
For Profit w/ 20-99 $1.76 per hour payable
*Businesses and nonprofits with fewer than 19 and 49 employees respectively are exempt.
In addition to providing your covered SF 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 an HCSO Notice in all workplaces with covered employees
- Submit an Annual Reporting Form to the Office of Labor Standards Enforcement by April 30 of each year.
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.