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HCSO News
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- New! As of January 1, 2017 the health care expenditure rate will be $2.64 per hour for large businesses (100 or more employees total) and $1.76 per hour for medium-sized businesses (20-99 employees total). For information on how the rate is calculated, see the definition of "Health Care Expenditure" in Admin Code Section 14.1.
- New!
 2017 HCSO Notice - Employers must post this Notice at workplaces as of January 1, 2017.
- As of January 1, 2017, employers may no longer make revocable Health Care Expenditures to comply with the spending requirement of the HCSO. See the HCSO Administrative Guidance on Revocable & Irrevocable Health Care Expenditures. The San Francisco Board of Supervisors phased out the use of Revocable Health Care Expenditures in the 2014 HCSO amendment.
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Overview
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- 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:
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Employer Size
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Number of Employees |
2016 Expenditure Rate |
2017 Expenditure Rate |
| Large |
All employers w/100+ employees |
$2.53 per hour payable |
$2.64 per hour payable |
| Medium |
Businesses w/20-99 employees
Nonprofits w/50-99 employees |
$1.68 per hour payable |
$1.76 per hour payable |
| Small |
Businesses w/0-19 employees
Nonprofits w/0-49 employees
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Exempt |
Exempt |
2. Maintain records sufficient to establish compliance with the employer spending requirement.
3. Post an HCSO Notice in all workplaces with covered employees.
4. Submit an Annual Reporting Form to the OLSE by April 30th of each year.
For details about these and other requirements, see our Administrative Guidance, review our other resources, or contact the OLSE at hcso@sfgov.org or (415) 554-7892  .
Employees who believe their rights have been violated may submit an HCSO Complaint Form:
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Administrative Guidance
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Advisory: The HCSO Administrative Guidance was last updated in January 1, 2016, and has not been revised to reflect all of the changes that take 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.
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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
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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
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Download HCSO Administrative Guidance Sections A-O
Download HCSO Administrative Guidance Section P on 2014 Expenditures and Enforcement
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Email Updates
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- Sign up for email updates! Join the OLSE email list for employers with 20 or more total employees (including those outside of San Francisco) to receive periodic updates about applicable San Francisco labor laws.
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General HCSO Resources
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- Statute: San Francisco Administrative Code Chapter 14: Health Care Security Ordinance.
- Full text of the HCSO Final Regulations. Advisory: The HCSO Regulations were adopted in 2007 and have not been revised since that time. Certain provisions in the Regulations are not consistent with the Health Care Security Ordinance ("HCSO"), Administrative Code Chapter 14. In particular, these Regulations have not been updated to reflect the 2011 or 2014 amendments to the Ordinance. In any instance where the Regulations conflict with the HCSO, the HCSO provision governs and should be followed instead.
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Annual Reporting
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The 2016 Annual Reporting Form can be accessed here. Please read the instructions and review a PDF Preview of the form. It must be submitted by May 1, 2017. Failure to submit may result in penalties of $500 per quarter.
- OLSE presented two webinars desgined to help employers fill out and submit the 2016 Employer Annual Reporting Form on April 4th and April 12th, 2017. View a webinar recording from April 12th, 2017 webinar. You may also download the webinar presentation slide deck.
The Office of Labor Standards Enforcement reports on the Annual Reporting Forms that employers submit each year.
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San Francisco City Option (Healthy San Francisco and Medical Reimbursement Accounts)
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- One way that employers may comply with the HCSO’s spending requirement is by making contributions to the City Option on behalf of their covered employees. Depending upon eligibility, employees who receive these contributions will receive:
- free or discounted enrollment in the Healthy San Francisco program, or
- a Medical Reimbursement Account to pay for out-of-pocket medical expenses.
- Upon contributing to the City Option, employers must provide their employees with a one-time Employee Health Care Payment Confirmation (PDF) (English) (Chinese) (Spanish) (Filipino/Tagalog).
- To learn more about contributing to the City Option, visit www.sfcityoption.org or contact City Option Program Management at employerservices@sfcityoption.org or (415) 615-4492 .
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Health Care Surcharges
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- 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.
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Hearing Officer Decisions and Upcoming Administrative Hearings and
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- Hearing Officer Decisions:
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Contact Us
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- 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.
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