HCAO requirements
Contractors and tenants in San Francisco (including those at the city's international airport and port) must provide free minimum health benefits to employees covered under the HCAO. The ordinance applies to employees who work at least 20 hours per week under a city contract or city property. Employees who work under a contract in San Francisco are covered even if their contract work occurs outside the city.
Minimum standards
Effective January 1, 2020, updated minimum standards from the Office of Standards and Labor Enforcement (OLSE) require plans to cover all benefits listed in the current California Essential Health Benefits (EHB) Benchmark Plan. The standards apply only to employee insurance and do not include or require dental or vision benefits. The OLSE also released an updated poster that employers must prominently display in every workplace in San Francisco by July 1, 2019.
Employers must obtain signed confirmation of a HCAO legal declaration from covered employees annually. Employees can waive their insurance claims 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 employees at the workplace or worksite.
Borders 2020
In addition to covering EHBs, a contractor's health plan must meet the following standards:
- The employer must pay 100% of the insurance coverage; there are no employee contributions.
- The maximum in-network deductible of $2,000 ($200 for prescription drugs) must cover 100% of actual expenses counted toward the medical deductible, regardless of plan type and amount.
- The 2020 In-Network Out-of-Pocket (OOPM) Maximum Spending of $7,850 must include all types of cost sharing (deductibles, copayments, coinsurance, etc.).
- Participants’ cost contribution must be limited to 20% for in-network treatment and 50% for out-of-network care.
- Copays for primary care cannot exceed $45.
Employers can use any health savings/reimbursement product that meets the minimum OOPM standard, and all Gold and Platinum plans are considered compliant according to Department of Health clarifications. Employers may offer other contributory options, but must provide at least one plan free of charge to covered employees that meets minimum standards.
Alternative payment
Effective July 1, 2019, employers covered by the HCAO who do not offer 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 of San Francisco, employers must make these payments directly to employees. Compensation is capped at $216 per workweek.
This rate is adjusted for inflation annually on July 1st. Employers should remit these amounts along with the HCAO Payment Option Form.
