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Most businesses would have to
pay
San Francisco Chronicle
November 23, 2005
By Charlie Goodyear
City legislation introduced Tuesday would
require San Francisco businesses with 20 or more workers to
pay for health care insurance, a move critics called illegal
and unworkable.
The ordinance, submitted by Supervisor Tom
Ammiano, would force businesses not offering medical coverage
to their workers to set up health savings accounts and pay
$345 a month per employee into them.
Businesses would use the savings to buy health
insurance for their workforce.
The $345 is what it costs the city government
per month to cover each of its workers.
Under the legislation, a task force would
be created to examine whether companies that say they can't
afford the $345 a month should be allowed to pay a lower,
unspecified fee directly to the city -- and the city would
provide coverage or direct medical care.
Companies also would have the option of reimbursing
their employees directly for the cost of health care, according
to the legislation.
"We have 40,000 people who are working
hard every day and do not have health care," Ammiano
said at a City Hall press conference before introducing the
legislation at the Board of Supervisors meeting Tuesday. "I
do not want people to choose between their rent and health
care."
He called the measure, which is backed by
the San Francisco Labor Council, the Senior Action Network
and other community groups, "an enlightened and overdue
piece of legislation." But it drew swift reaction from
groups that opposed similar state legislation last year.
"Supervisor Ammiano calls his coverage
'universal,' but the only thing universal about the Worker
Health Care Security Act is the universal damage it will do
to San Francisco's economy," said Mike Flynn, director
of legislative affairs for the Employment Policies Institute
in Washington, D.C.
"Expanding insurance coverage is a laudable
goal," Flynn added, "but you can't wave a wand
and do it by legislative command. His proposal would slap
San Francisco's businesses with staggering costs and lead
to tremendous job loss among the city's least-skilled workers."
Nathan Nayman, the director of San Francisco's
Committee on Jobs, a lobbying group for downtown business
interests, echoed the point. "This is going to have a
negative consequence on business in the city. There's just
no doubt about it," Nayman said.
The legislation is the latest in a long line
of similar attempts at the local, state and federal levels.
Efforts to offer health care to all San Francisco residents
stalled in the late 1990s. Last year, a slim majority of California
voters turned aside Proposition 72, which would have required
medium and large businesses to pay 80 percent of employees'
health-care costs.
In San Francisco, however, Prop. 72 won overwhelming
support, nearly 70 percent of voters backing the measure.
Ammiano would need six votes on the 11-member
Board of Supervisors to pass the measure. He was joined Tuesday
by Supervisors Ross Mirkarimi, Chris Daly and Sophie Maxwell.
Daly said the city pays as much as $25 million
annually for medical services for the uninsured. "We
can't keep continuing with the money that we're spending without
the private sector making good on a social contract,"
he said.
Eight votes would be needed to withstand
a mayoral veto -- and Mayor Gavin Newsom indicated he would
need to be persuaded to support Ammiano's legislation.
On Tuesday, Newsom said he hadn't seen the
details of the proposed ordinance but voiced concern that
it could "have a serious impact on San Francisco's (economic)
recovery and our ability to compete.''
Newsom said he agrees with Ammiano that the
lack of adequate health care is a serious problem, but he
wasn't ready to endorse the supervisor's solution.
"I think it's noble,'' he said, "except
we have to be considerate that we're not an island and that
the impact this could have on small mom-and-pops -- business
that we're trying to promote and expand and help grow and
steward -- could be significant, so we have to be cautious.''
Newsom, who supported Prop. 72, said a statewide
approach would be more prudent. "Citywide, we have to
be a little more cautious.''
Small business advocates said legislation
like Ammiano's, though well-intentioned, is ultimately misguided
and doesn't address the real problem of skyrocketing health-care
costs.
Scott Hauge, president of Small Business
California, runs an insurance brokerage with 33 employees.
He offers health care for his workers and has seen his annual
bill rise from $80,000 to nearly $149,000 in just a few years.
"We did meet with Tom and talk in general terms about
the proposal," Hauge said Tuesday. "The big concern
is what are the cost controls associated with health care?
There's no end in sight. If nobody provides cost controls,
it will go up double digits every year. You have businesses
that operate closer to the margin that just don't have the
wherewithal to pay."
Jot Condie of the California Restaurant Association,
called the notion of making small business pay for health-care
costs ridiculous.
"What Supervisor Ammiano is suggesting
here is definitely the wrong solution," Condie said.
"Employer-mandated health care is a flawed vehicle to
insure everybody."
Condie said restaurants and other small businesses
typically operate at small profit margins. If Ammiano's legislation
passes, it would likely drive them out of town, he said. "The
fact that it's a city proposal, the notion of flight from
San Francisco and its tax base really is a relevant point."
Ammiano doesn't buy the argument. "As
to businesses moving, I haven't seen them move," he said.
"They're not going to move."
Businesses that offer health care for their
workers have higher productivity, he said, and do better in
the marketplace.
Hearings on the legislation aren't expected
to be scheduled until early next year.
If passed, the measure also almost certainly
would face a court challenge. Opponents said it runs afoul
of federal regulations governing how companies provide heath
care to their workers.
"There is definitely a school of thought
that suggests this is a flat-out violation of federal laws,"
Condie said. "If this passes, I imagine there is probably
standing to go to court."
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