Benefits August 5, 2011

San Francisco Lawmaker Withdraws Health Care Proposal

August 5, 2011 (PLANSPONSOR.com) - San Francisco lawmakers have voted to drop a measure that would have changed the city’s health care law so that unused amounts contributed to health reimbursement arrangements for employees would be rolled over from year to year.
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The law requires employers with more than 20 employees to spend a certain amount for employee health care coverage, and most satisfy the requirement through payment of health care insurance premiums.  However, employers also can contribute the required amounts to health reimbursement arrangements for employees, from which, at the end of the year, unused funds revert back to the employer, according to Business Insurance.  

Business Insurance reports that last month, David Campos, a member of the San Francisco Board of Supervisors proposed to amend the requirement so that unused HRA funds automatically would roll over to the next year. The proposal was generated by a June report by the city’s Office of Labor Standards Enforcement that found that only 20% of the $62 million allocated to the plans last year was actually reimbursed to employees.   

Campos withdrew the measure because, observers said, he lacked the votes necessary to approve it.  

Business Insurance said in all, about 13% of employers last year used the HRA approach to satisfy the spending requirement, according to the Office of Labor Standards Enforcement report.

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