Since 2008 the City of San Francisco has required companies with 20 or more employees to meet minimum health care spending requirements. For 2018, Large Employers (100 or more employees) must spend $2.83 per hour on health care for their employees who work in the City. The minimum for Medium-Sized Employers (20 – 99 employees) is $1.89 per hour. Companies with 19 or fewer employees and not-for-profit organizations with 50 or fewer are exempt.
As of January 1, 2014, employers with 50 or more full-time employees must also consider their obligations to provide health insurance coverage as required by the federal Affordable Care Act (“ACA”).
This plan is designed primarily for part-time employees working less than 30 hours per week – who are subject to the HCSO but not the ACA. It may also be provided for full-time employees with the understanding that it does not satisfy the requirements of the ACA.
Employees will appreciate the AGU San Francisco Limited Accident & Sickness Indemnity Plan more than the City Option, because:
Employers like this approach because group insurance policies, like this one, have long enjoyed tax-advantaged status in two respects. First, premiums paid by an employer are deductible as a business expense and second, neither the value of the employer’s contribution nor the value of benefits received under the policy are taxable income to employees. Neither part of the City Option involves group insurance so the tax treatment may not necessarily be the same. Consult your tax advisor.