The title of this post is a prediction rather than a description. The New York Times reports that a three judge panel from the U.S. Ninth Circuit Court of Appeals granted the city of San Francisco, CA a temporary reprieve from a lower court ruling that would’ve prevented the city from forcing small business owners to pay $1.17 to $1.76 per hour, per employee for health care expenses…regardless of whether they already provide employees health care. While the case is formally appealed to the Ninth Circuit, anyone who owns a business with more than 20 employees must pay the fees, which can go toward a variety of health-care options, including employer-provided insurance, health savings accounts, direct payment of medical bills, or payment in a new city program called Healthy San Francisco.Some employers, however, say the plan places an undue burden on smaller businesses, many of which are already paying for employee benefits. “It’s expensive, it’s unsustainable and there’s better ways to do it,” said Daniel Scherotter, the incoming president of the Golden Gate Restaurant Association, which filed the suit challenging the law.
Mr. Scherotter, who owns an Italian restaurant in the city, estimates that he already spends $60,000 a year on health insurance, but that the new plan could cost him twice that.
“Everybody seems to know that restaurants are really risky business, but somehow, they’re saying, ‘Oh, they’re rolling in it, they can pay for it,’ ” he said.
Will San Francisco solve the nation’s uninsured health care crisis or will it drive away small businesses because paying the expenses will make them unprofitable? Well, the only way to find out is if the appeal is lost.
Unfortunately, the lawsuit is based upon a “conflict of laws” theory (whether the City’s ordinance conflicts with or attempts to trump a Federal law), so if the Supreme Court agrees to hear it, it won’t be directly ruling on the notion of employer-sponsored health care. However if it does get to the Supreme Court of the United States, we may get some interesting dicta about the notion of employer-based (funded) health care and whether this sort of welfare program has a chance with other city or state governments.
The funny thing is - the added expense will ultimately be passed down to the employees of these business and the consumers, the very people who will be utilizing the free health services in the first place. These people could take it upon themselves to buy health insurance…a much cheaper alternative than a City-built infrastructure.
Mr. Scherotter, who owns an Italian restaurant in the city, estimates that he already spends $60,000 a year on health insurance, but that the new plan could cost him twice that.
“Everybody seems to know that restaurants are really risky business, but somehow, they’re saying, ‘Oh, they’re rolling in it, they can pay for it,’ ” he said.
Will San Francisco solve the nation’s uninsured health care crisis or will it drive away small businesses because paying the expenses will make them unprofitable? Well, the only way to find out is if the appeal is lost.
Unfortunately, the lawsuit is based upon a “conflict of laws” theory (whether the City’s ordinance conflicts with or attempts to trump a Federal law), so if the Supreme Court agrees to hear it, it won’t be directly ruling on the notion of employer-sponsored health care. However if it does get to the Supreme Court of the United States, we may get some interesting dicta about the notion of employer-based (funded) health care and whether this sort of welfare program has a chance with other city or state governments.
The funny thing is - the added expense will ultimately be passed down to the employees of these business and the consumers, the very people who will be utilizing the free health services in the first place. These people could take it upon themselves to buy health insurance…a much cheaper alternative than a City-built infrastructure.
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