The San Francisco Office of Labor Standards Enforcement has announced that the deadline for employers with San Francisco employees to complete the annual San Francisco Health Care Security Ordinance (SF HCSO) reporting has been extended slightly to May 3, 2024. A preview of the SF HCSO annual reporting form can be viewed here in order to gather all necessary information before logging on to submit the form.

Background

• The HCSO, which has been in effect since 2006, requires covered employers to spend a minimum amount of money on health care per covered employee per year.
• The following irrevocable expenditures are included when calculating an employer’s healthcare expenditures:
  • Amounts paid for health, dental, or vision insurance
  • Payments made on an employee’s behalf through the San Francisco City Option
  • Direct reimbursements to an employee for eligible healthcare services
  • Any costs incurred in the direct delivery of healthcare services to an employee (e.g., employer on-site clinic)
• Employees are exempt from HCSO requirements if they fall into one of five categories:
  • Managers, supervisors, or confidential employees who earn more than the applicable salary exemption amount ($114,141/year or $54.88/hour for 2023)
  • Employees covered by Medicare or Tricare
  • Employees who, for up to one year, are trainees in a bona fide training program within a non-profit corporation
  • Employees who receive healthcare benefits under the San Francisco Health Care Accountability Ordinance
  • Employees who voluntarily waive their rights under the HCSO
• The HCSO includes a notice/posting requirement and mandates that employers maintain, for a period of four years, records that are sufficient to establish compliance with the ordinance.

2023 Requirements

• The 2023 health care expenditure rate is based on the number of employee hours worked in San Francisco and differs according to the size of the employer (counting all employees, not just those in San Francisco):
  • 100 or more employees: $3.40 per hour worked
  • 20-99 employees: $2.27 per hour worked
  • Fewer than 20 employees: exempt
• Employers are required to make expenditures under the HCSO for any employees who work remotely at a location within San Francisco and otherwise qualify as HCSO covered employees.
• The 2023 Employer Annual Form and instructions for completing the form are located on the HCSO website.
• The following information is needed in order to complete the form:
  • San Francisco business account number
  • Total number of employees nationwide per quarter
  • Number of HCSO covered employees (San Francisco employees only) per quarter
  • Total number of HCSO covered employees enrolled in the employer-sponsored medical/dental/vision plan
  • Total employer share of medical/dental/vision premium paid for all HCSO covered employees and their dependents per quarter
  • Quarterly contributions to the San Francisco City Option
  • Quarterly employer HSA contributions for HCSO covered employees
  • Fair Chance Ordinance reporting, if applicable