| Effective January 9, 2008, the Health Care Security | | | | Another option is to offer those in San Francisco a |
| Ordinance (HCSO) requires certain employers to | | | | Health Reimbursement Account (HRA). A HRA is an |
| make health care expenditures for their covered | | | | account based plan funded by the employer that can |
| employees. Currently, the health care expenditure rate | | | | be used to pay for eligible medical expenses. The |
| for employers with 20 to 99 employees is $1.23 per | | | | employer has the option to allow the fund to roll over |
| hour; for employers with 100 or more employees, the | | | | or for the remaining dollars to be forfeited at the end |
| rate is $1.85 per hour. | | | | of the plan year. Additionally, if the employee changes |
| Beginning January 1, 2010, the health care expenditure | | | | jobs, the money remains with the employer. |
| rate will increase to $1.31 per hour and $1.96 per hour | | | | Why this option is financially advantageous |
| respectively. The city arrived at these amounts | | | | The HRA should be setup under a 125 Cafeteria Plan |
| because it is the average cost for a city employee. | | | | and as such, requires that the reimbursements be |
| Unless you have a high cost population, your employee | | | | subject to the IRS rules. The funds are for a |
| do not likely cost nearly this much. | | | | reimbursement of health care expenses, meaning they |
| Employers in San Francisco have a few options to | | | | were already incurred by the employee, a legitimate |
| comply with the mandate. They can simply opt to pay | | | | expense. |
| the city through Healthy San Francisco, an access plan, | | | | Unlike paying the city, you are only spending money on |
| which ends up being similar to that of a payroll tax. | | | | your employees. And unlike expanding your coverage |
| Administratively, this is the cleanest. Financially, this is | | | | or changing your eligibility, you are not increasing your |
| the most expensive. Business owners who already | | | | risk beyond that of your required quarterly contribution. |
| offer health coverage can adjust their plans to meet | | | | If you are interested in learning how to setup a HRA or |
| the city requirements, but if you have employees | | | | how much this option can save your organization, feel |
| outside of San Francisco this increases your | | | | free to contact us a and we'll help provide you with |
| administrative burden and creates inequity amongst | | | | what you need. |
| your employees. | | | | |