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By Bob Egelko
San Francisco Chronicle
The U.S. Supreme Court allowed San Francisco on Thursday to continue requiring employers to pay part of the cost of providing health care to uninsured residents while a group of restaurant owners tries to overturn the program.
Justice Anthony Kennedy denied a request by the Golden Gate Restaurant Association to suspend the employer contributions while the case awaits an April 17 hearing before an appellate panel.
The city expanded its health care program six weeks ago after winning a ruling from the Ninth U.S. Circuit Court of Appeals in San Francisco. That court allowed city officials to require large and medium-size companies to provide insurance to their employees, at spending levels set by the city, or pay a fee to support care for the uninsured at 22 hospitals and clinics.
The expansion lets San Francisco phase in coverage for about 26,000 residents who were not previously eligible for subsidized care. The city says the program will ultimately cover all 73,000 adult residents who are not poor enough for Medi-Cal or old enough for Medicare. About 12,500 people have enrolled so far, program Director Tangerine Brigham said Thursday.
The ordinance is the first in the nation to offer health care for all uninsured residents in a city. Most of the estimated $200 million annual cost is to be covered by state and local taxes and by payments from patients based on their income. The rest, less than 20 percent of the total, would come from employers who don’t insure their workers.
The Golden Gate Restaurant Association, representing 900 businesses, filed a lawsuit claiming that the ordinance violates a federal law that prohibits state and local governments from regulating employee benefit plans.
U.S. District Judge Jeffrey White agreed with the association Dec. 26 and barred the city from requiring the employer fees, which would be due starting April 30. But the appeals court suspended White’s ruling Jan. 9 and allowed the fees, and the expansion of the program, to take effect while the case was on appeal.
The three-judge panel said San Francisco is likely to win its case, as it is not trying to regulate employee benefit plans but instead give employers several options to protect their workers’ health. Uninsured people’s hardships from not having health care are far greater than the hardships that businesses would suffer by making payments that could be refunded if they won their suit, the court said.
The restaurant association filed papers Feb. 8 seeking intervention by Kennedy, the Supreme Court justice who handles emergency requests from the region. Until the courts decide whether the program is legal, the association argued, employers should not be burdened with fees and associated record-keeping, and San Francisco should not be allowed to impose unique requirements that interfere with uniform national regulation of employee benefits.
The city and a group of labor unions replied Wednesday, arguing that the program is legally sound and is already improving health care in San Francisco with minimal burdens on businesses.
Some restaurants have started adding a small surcharge to customers’ bills to pay for employees’ health coverage, and some employers have notified their staffs that they will pay fees to the city that will make them eligible for care in the city’s network, said lawyers for the city and the unions.
They also said Supreme Court intervention is unnecessary because the appeals court will hear the case April 17 and can act before the first payments are due April 30.
"It’s exciting that San Francisco is in the forefront of figuring out ways to pay for universal health care access," Stacey Leyton, a lawyer for the unions, said Thursday after Kennedy refused to suspend the employer contributions.
The restaurant association’s executive director, Kevin Westlye, said the justice’s order was "part of the legal process" and that the association would pursue its case before the appeals court.
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