Jackson Square Financial has over 20 years of local experience helping business owners navigate the often complex in’s and out’s of compliance with HCSO. They offer a cost-effective solution to ensure that those HCSO-mandated contribution dollars go the farthest for a business’ employees.
We first met Loran at the San Francisco Small Business Week 2016, and met his partner, Ryan, shortly thereafter. We were thrilled when they agreed to share their industry insight on this topic.
The San Francisco Health Care Security Ordinance: Does It Apply to Your Business?
By: Smith Shapourian Mignano LLP
Depending on the size of your work pool, your small business may be subject to the San Francisco Health Care Security Ordinance (“HCSO”), which obligates “Covered Employers” to spend a minimum amount of money each quarter on the health care of their “Covered Employees.”
Your business may be a “Covered Employer” if your business:
- Employs one or more workers within the geographic boundaries of the City and County of San Francisco;
- Is required to obtain a valid San Francisco business registration certificate pursuant to Article 12 of the Business and Tax Regulations Code; and
- Is a for-profit business with 20 or more persons performing work; or a nonprofit organization with 50 or more persons performing work. These figures include all persons working for the entity, regardless of whether they are based in San Francisco or outside of the city.
Your business may have “Covered Employees” if it has employees who have been employed for more than 90 days and who regularly work at least 8 hours per week in San Francisco. Under the HCSO, Covered Employees are entitled to minimum wage, with access to affordable health care through a Health Access Program.
Records and Reporting
If your business qualifies as a “Covered Employer” with “Covered Employees,” then certain record and reporting requirements apply.
First, there is a four-year record retention policy, which begins to run at the time of hire. Under the recordkeeping policy, your business is required to store itemized pay records; the employee’s address, telephone number, and the date of first day of work; records of any Health Care Expenditures made by your business, on a quarterly basis; and if applicable, documentation supporting the exemption of an employee from coverage, such as a signed Employee Voluntary Waiver Form.
Second, regarding the reporting requirements, Covered Employers must submit an Annual Reporting Form to the Office of Labor Standards Enforcement (“OLSE”) by April 30th of each year.
2016 Health Care Expenditure Rate
In 2016, based on the HSCO, employers with 100 or more employees paid a health care expenditure rate of $2.53 per hour, and employers with 20 to 99 employees paid a health care expenditure rate of $1.68 per hour.
By: Loran McBride and Ryan Sittauer of Jackson Square Financial
Starting-up and running a small business in San Francisco can be a daunting task, especially when you’re unsure of what it takes to be compliant with the cities various laws and ordinances surrounding employee benefits. One of the biggest pain points for business owners in San Francisco is the Health Care Security ordinance, commonly known as the HealthySF Tax, which mandates a set dollar amount per hour be contributed towards health care for your employees.
Although small businesses and start-ups with under 20 employees are exempt from the HealthySF tax, it is still advantageous to offer basic employee benefits such as medical, dental, and vision coverage at the very least. Employee benefits are one of the best ways to attract new hires and retain employees within your company. Group health insurance plans are traditionally more cost effective than individual plans.
Some key considerations that business owners may confront when determining whether and which plans to purchase may include:
- Would my employees prefer an HMO or PPO structured medical plan?
- What metal tier suits my employee’s needs best? (Bronze, Silver, Gold, or Platinum?)
- Do I want to contribute more than 50% to my employee’s plans?
- Do I want to contribute towards my employee’s spouse plans?
- What do I want the waiting period to be for new hires to join the plan? (60 or 90 days?)
Of course, these considerations are not the be-all-end-all for your business, and so it is best to reach out to an experienced benefits broker who can help your business navigate these decisions and more.
Smith Shapourian & Mignano, LLP is available to answer any questions or concerns you may have regarding regarding compliance with the HCSO. Feel free contact us to learn more.
This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.