San Francisco’s Health Care Security Ordinance Requires New Contribution Rates for 2024

Employers in San Francisco should be aware of a rate change in the Employer Spending Requirement (ESR) effective January 1, 2024.

Which employers must comply:  An employer is covered by the Health Care Security Ordinance (HCSO) for any calendar quarter if it meets the following three conditions:

  • employs one or more workers within the geographic boundaries of the City and County of San Francisco;
  • is required to obtain a valid San Francisco business registration certificate pursuant to Article 12 of the Business and Tax Regulations Code, and
  • is a for-profit business with 20 or more persons performing work or a nonprofit organization with 50 or more persons performing work. This includes all persons working for the entity, regardless of whether they are located in San Francisco or outside of the city.

Businesses must meet the ESR requirements by making health care contributions on behalf of all covered employees.

A “covered employee” is an individual that has been employed for more than 90 days and who regularly works at least 8 hours per week in San Francisco.  There are exemptions for certain employees that can be reviewed by clicking here.

Beginning January 1, 2024, businesses must pay the following rates:

  • Employers with 100+ employees: $3.51 per hour payable (up 11 cents from 2023)
  • Employers with 20-99 employees: $2.34 per hour payable (up 07 cents from 2023)
  • Employers with fewer than 20 employees are exempt from the requirement
  • Nonprofits with fewer than 50 employees are also exempt from the requirement

The 2024 HCSO Poster has not been released yet. For more information, please visit the HCSO website directly or contact me for more information.

About Michelle Cammayo, Compliance National Practice Leader, Employee Benefits

Michelle Cammayo has close to 20 years of Employee Benefits experience specializing in all lines of health and welfare benefits. Today, Michelle works closely with clients and partners to provide guidance in areas of the law including ERISA, HIPAA, COBRA, FMLA and PPACA. She is also the IMA National Practice Leader for Compliance and endeavors to ensure IMA helps its clients manage and eliminate risk in the most effective manner. She is passionate about educating others and her passion for this shined in the COVID era where Michelle conducted weekly and then monthly webinars providing guidance to employers. Her podcast, Cammayo’s Compliance Talk, has gained popularity in the last three years to become a favorite amongst our clients. She also contributes regularly to our Blog and has authored several articles for industry-related newsletters. Michelle’s consultative approach with employers provides practical advice as employers endeavor to be compliant.

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