San Francisco contractors and tenants (including those at the city’s international airport and port) must offer minimum health benefits at no cost to covered employees under the HCAO. The ordinance applies to employees who work at least 20 hours per week on a city contract or city property. Employees working on a San Francisco contract are covered, even if their contract work is done outside the city.
Effective Jan. 1, 2020, updated minimum standards from the Office of Standards and Labor Enforcement (OLSE) require plans to cover all services listed in California’s current essential health benefit (EHB) benchmark plan. The standards apply to employee-only coverage and don’t include or require dental or vision benefits. The OLSE also has released an updated poster that employers must conspicuously display in each San Francisco worksite by July 1, 2019.
Employers must annually obtain covered employees’ signed acknowledgment of a HCAO statement of rights. Employees may waive their coverage rights by signing the appropriate form. All notices and posters must be available in English, Spanish, Chinese, and any other language spoken by at least 5% of the employees at the workplace or job site.
Besides covering EHBs, a contractor’s health plan must comply with the following standards:
- Employers must pay for 100% of the coverage with no employee contributions.
- The maximum in-network deductible of $2,000 ($200 for prescriptions drugs) must include 100% of actual expenditures that count toward the medical deductible, regardless of plan type and level.
- The maximum in-network, out-of-pocket maximum (OOPM) expense of $7,850 for 2020 must include all types of cost sharing (deductible, copays, coinsurance, etc.).
- Participants’ cost sharing must be capped at 20% for in-network treatment and 50% for out-of-network care.
- Primary care copayments can’t exceed $45.
Employers may use any health savings/reimbursement product that complies with the minimum OOPM standard, and all gold- and platinum-level plans are deemed compliant, according to the Department of Public Health’s clarifications. Employers can offer other contributory options but must make at least one plan available at no cost to covered employees that meets minimum standards.
Effective July 1, 2019, HCAO-covered employers that don’t provide minimum benefits must pay the city an additional $5.40 per hour for covered employees who live or work in San Francisco. For covered employees who live or work outside San Francisco, employers must make these payments directly to the employees. The payment is capped at $216 per workweek.
This rate is annually adjusted for inflation on July 1. Employers should remit these amounts along with the HCAO Payment Option Form.