Employee Benefits Compliance

Employers with San Francisco Employees Reminder – San Francisco Health Care Security Ordinance Expenditure Due!

San Francisco CA

The San Francisco Health Care Security Ordinance (HCSO) requires employers with employees in San Francisco to make health care expenditures for their the applicable employees quarterly. If a covered employer does not meet the expenditure requirement for their own health plan, the employer may make quarterly expenditures to the SF City Option.

The deadline to make first quarter expenditures to the SF City Option is April 30th.

Annual Reporting Mandated. The law also requires covered employers to submit an annual reporting form to the San Francisco Office of Labor Standards Enforcement (OLSE) by April 30th of each year. OLSE releases the annual reporting form annually on April 1st. Covered employers who fail to submit reporting by April 30th may be subject to a $500 penalty per quarter.

Who is a Covered Employer?

Employers are subject to the HCSO if they:

  • Employ one or more workers within the geographic boundaries of the City and County of San Francisco;
  • Are a for-profit business with 20 or more employees worldwide or a nonprofit with 50 or more employees worldwide; and,
  • Are required to obtain a San Francisco Business Registration Certificate.

Who is a Covered Employee?

  • Entitled to be paid the minimum wage.
  • Employed for at least 90 calendar days.
  • Performs at least 8 hours of work per week in San Francisco.

Exempt Employees

The HCSO exempts:

  • Employees who receive health care benefits through another employer and who have waived employer Expenditures by signing an OLSE Employee Voluntary Waiver Form.
  • Employees who qualify as a manager, supervisor or confidential employee and earn more than the applicable salary exemption amount ($107,991 / $51.92 salary/hourly for 2021; $109,643 /$52.71 salary/hourly for 2022).
  • Employees covered by Medicare.
  • Employees employed by a non-profit corporation for up to one year as trainees in a bona fide training program (as defined in the Code of Federal Regulations, Title 29, Part 520).
  • Employees who receive health care benefits under the San Francisco Health Care Accountability Ordinance.

How much are Covered Employers required to spend on Covered Employees?

The amount that is required to be spent on each Covered Employee is dependent on the size of the Covered Employer and the number of hours a Covered Employee works.

Employer Health Care Expenditure Rates  
Business Size (Company Wide)20212022
Large (100+ Employees)$3.18/hour$3.3/hour
Medium (20-99 Employees)*$2.12/hour$2.20/hour
Small (1-19 Employees)Exempt from requirementExempt from requirement

Quarterly expenditures are due on April 30, October 30, July 30, and January 30 of each year. If a Covered Employer is not currently spending enough on their Covered Employees healthcare (this would include premiums paid for medical, dental, and vision insurance, amounts spent on dependents, as well as any HSA contributions made on the employee’s behalf), they would need to make any shortfall payments to the SF City Option.

Need Help?

Be sure to contact your Leavitt Group representative. We are your Trusted Advisor for all of your compliance needs. We have an ERISA compliance on staff with expertise on HCSO. Subscribe to the Leavitt Group news alerts to stay on top of all of the compliance news that may apply to your plans.

Health Care Security Ordinance Contact Information:

For more information about the Health Care Security Ordinance, including the Employer Health Care Expenditure Rate Schedule, satisfying reporting requirements and maintaining compliance, you may visit the San Francisco Office of Labor Standards Enforcement (OLSE) website.

For more information on annual HCSO reporting, visit the OLSE FAQ website. Be sure to sign up for the HCSO email list here to receive an annual reporting reminder from OLSE.

HCSO Website

HCSO Hotline: (415) 554-7892