Ninth Circuit Upholds San Francisco's Health Care Ordinance

A panel of the Ninth Circuit upheld San Francisco's Healthcare Security Ordinance. The ordinance requires employers either to maintain a certain expenditure on health care for its employees or contribute the minimum to the city. The city operates a healthcare access plan, called Healthy San Francisco, funded by these taxes - er - contributions by the employers.

The Golden Gate Restaurant Association challenged SF's plan as preempted by ERISA.
Late in 2007, the district court held ERISA indeed preempted the ordinance. We posted on that here.

The district court's opinion lasted about a week. The Ninth Circuit stayed the district court's decision, foreshadowing its view that ERISA does not preempt the law. The Ninth Circuit panel decided the ordinance neither creates and ERISA plan nor "relates" to a plan. In its long opinion, the court rejected a series of arguments advanced by the Golden Gate Restaurant Association and a number of amici curiae, including the U.S. Department of Labor.
Unless or until the Supreme Court overrules this case, it will probably result in more local ordinances establishing mandatory health care systems. Employers will have to have different benefits coverage in different jurisdictions, pay the higher taxes, or increase coverage to the highest common denominator....

The case is Golden Gate Restaurant Association v. San Francisco, and the opinion is here.