The San Francisco Office of Labor Standards Enforcement (OLSE) has released the Health Care Expenditure rates for 2022:
What are the Employer Obligations?
Under the HCSO, Covered Employers with 20 or more employees (50 or more employees for nonprofits) in any quarter are required to make a minimum level of health care expenditures for that quarter for employees:
- Who have been employed by the employer for at least 90 days,
- Who have performed at least 8 hours of work in San Francisco,
- And who do not meet one of the five exemption criteria.
Update on Telework during Health Order Restrictions.
With the continuing COVID-19 pandemic, many employees are still working from home. Originally, the Board stated that employers will not be required to make expenditures for any employees who work outside of the geographic boundaries of San Francisco, but will be required to make expenditures for any remote employees who live in San Francisco.
On June 22, 2021, the Board of Supervisors passed an amendment to the HCSO providing that if a public health order places restrictions on onsite work in San Francisco, employees’ hours working from home will be treated as hours worked in San Francisco for HCSO purposes if the employee was, is, or after the pandemic will be permitted or required to work from the employer’s office or worksite in San Francisco.
Note that currently there is no public health order recommending telework. The earlier order was removed on June 11, 2021. Accordingly, unless or until the City issues a new health order with workplace restrictions, employees working remotely outside of San Francisco are not covered by the HCSO employer spending requirements.
- For full details, see our previous post: SF HCSO Compliance in the Work-From-Home Era.
Although the April 2021 reporting for 2020 HCSO expenditures was once again delayed and subsequently cancelled, employers are still required to make the 2021 quarterly expenditures.
In addition to making the required expenditures, Covered Employers are also required to:
- Maintain records sufficient to establish compliance with the employer spending requirement
- Post an HCSO Notice in all workplaces with covered employees
- Submit the Annual Reporting form by April 30 each year.
Who is a Covered Employer?
You are a covered employer and are required to make health care expenditures if you met the following three conditions:
- employed one or more workers within the geographic boundaries of the City and County of San Francisco;
- were required to obtain a valid San Francisco business registration certificate pursuant to Article 12 of the Business and Tax Regulations Code,
- employed 20 or more persons worldwide (for profit) a nonprofit organization that employed 50 or more persons worldwide.
Which Employees are Exempt or Excluded from Eligibility under the HCSO?
There are five categories of exempt employees:
- Employees who sign a waiver form and voluntarily waive their right to have employers make Health Care Expenditures for their benefit.
- Employees who qualify as Managers, supervisors or confidential employees AND earn more than the applicable salary exemption amount of $109,643 for 2022.
- Employees who are covered by Medicare or Tricare.
- Employees who are employed by a non-profit corporation as a trainee in a bona fide training program.
- Employees who receive health care benefits pursuant to the San Francisco Health Care Accountability Ordinance (HCAO)
A Reminder about the Waiver Form
The Employee Voluntary Waiver Form permits employees to voluntarily waive their right to employer health care expenditures under the HCSO. Employers must use the exact form and may not change the form in any way. Full details here.
For more information on all of the HSCO requirements, check out the SF OLSE’s official HSCO website.
For more information, see our 2021 Newfront San Francisco Health Care Security Ordinance (HCSO) Guide.
About the author
VP, Senior Compliance Manager
Karen Hooper, CEBS, CMS, Fellow, is a Vice President and Senior Compliance Manager working closely with the Lead Benefit Counsel in Newfront's Employee Benefits division. She works closely with internal staff and clients regarding compliance issues, providing information, education and training.
The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. Newfront shall have no liability for the information provided. While care has been taken to produce this document, Newfront does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.
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