Health Care Security Ordinance (HCSO)

Overview

Under the Health Care Security Ordinance (HCSO), all covered employers must meet the following obligations:

1. Satisfy the Employer Spending Requirement by making required health care expenditures on behalf of all covered employees (those who have been employed for more than 90 days and who regularly work at least 8 hours per week in San Francisco) at the following rates:

 Employer Size

Number of Employees  2017 Expenditure Rate  2018 Expenditure Rate
 Large All employers w/100+ employees  $2.64 per hour payable  $2.83 per hour payable
 Medium Businesses w/20-99 employees
Nonprofits w/50-99 employees
 $1.76 per hour payable  $1.89 per hour payable
 Small

Businesses w/0-19 employees
Nonprofits w/0-49 employees

 Exempt  Exempt
  • 2018 Exemption Threshold: managerial, supervisory, and confidential employees who earn more than $97,722 (or $46.98 per hour) are exempt.  More information and rates from prior years are available here.

2. Maintain records sufficient to establish compliance with the employer spending requirement.

3. Post the PDF icon2018 HCSO Poster in all workplaces with covered employees.

4. Submit an Annual Reporting Form to the OLSE by April 30th of each year.

If you have questions about the San Francisco Health Care Security Ordinance or wish to report a violation of the law, call 415-554-7892 or email hcso@sfgov.org.

  • Employees who believe their rights have been violated may submit an HCSO Complaint Form:

           PDF iconHCSO Complaint Form English - PDF iconComplaint Form Chinese - PDF iconComplaint Form Spanish

Statutory Authority

Advisory: The HCSO Administrative Guidance has not been revised to reflect all of the changes that took effect on January 1, 2017.  Certain provisions of this Guidance, therefore, may not be consistent with the Health Care Security Ordinance ("HCSO"), Administrative Code Chapter 14.  In particular, no provision of the Guidance should be interpreted to mean that anything other than fully irrevocable Health Care Expenditures can be counted toward the employer spending requirement, as of first quarter of 2017.  In any instance where the Administrative Guidance, or the Regulations, conflict with the Ordinance, the Ordinance itself governs and should be followed instead.  Contact OLSE for more information.

A. Overview
B. Covered Employers
C. Covered Employees
D. Calculating Required Health Care Expenditures
E. Making Required Health Care Expenditures
F. Revocable & Irrevocable Health Care Expenditures
G. Contributing to the City Option
H. Employer Notice-Posting Requirement

I. Employer Recordkeeping Requirements
J. Employer Reporting Requirements
K. Health Surcharges
L. Retaliation Prohibited
M. Filing a Complaint
N. Penalties
O. HCSO and the Affordable Care Act
P. Expenditures and Enforcement Guidance for 2014

   

Download PDF icon HCSO Administrative Guidance Sections A-O

Download PDF iconHCSO Administrative Guidance Section P on 2014 Expenditures and Enforcement

HCSO Resources

Annual Reporting

Employers covered by the Health Care Security Ordinance are required to submit the Employer Annual Reporting Form by April 30 each year or face penalties of up to $500 per quarter. The 2017 Employer Annual Reporting Form is no longer available. The 2018 Employer Annual Reporting Form will be available online by April 1, 2019, and will be due by April 30, 2019.

San Francisco City Option

One way that employers may comply with the HCSO’s spending requirement is by making contributions to the SF City Option on behalf of their covered employees. Depending upon eligibility, employees who receive these contributions will receive (1) enrollment in the SF MRA or SF Covered MRA programs to pay for out-of-pocket medical expenses or (2) free or discounted enrollment in the Healthy San Francisco program.

Health Care Surcharges

  • Businesses are neither required to, nor prohibited from, imposing surcharges on their customers to offset the cost of complying with the Health Care Security Ordinance. However, employers that elect to impose such surcharges must comply with specific requirements.
  • On May 1, 2009, the State Board of Equalization issued a Special Notice (PDF) regarding the taxability of such surcharges. To reach the State Board of Equalization, please call (800) 400-7115.

Contact Us

  • Please email hcso@sfgov.org or call 554-7892 with any questions regarding your rights and responsibilities under the San Francisco Health Care Security Ordinance.
  • Sign up for email updates! Join the OLSE email list to receive periodic updates about San Francisco labor laws.