San Francisco health plan does not violate ERISA, court rules

A three-judge panel of the 9th U.S. Circuit Court of Appeals  unanimously overturned a lower court ruling that San Francisco’s universal health care program violates federal law (Source: “Court upholds legality of SanFran health care plan,” Associated Press, Oct. 1, 2008).

Healthy San Francisco is the first plan in the nation to offer universal coverage with a requirement that companies with more than 20 employees either provide health care or pay the city a fee to offset the program’s cost. It provides basic care for about 30,000 uninsured San Franciscans.

The case against the plan was brought by a restaurant trade association, which claimed the employer fees posed an unreasonable financial burden and were illegal under the federal Employee Retirement Income Security Act, or ERISA, which sets standards for federal, state and local benefit plans. The Bush Administration also filed arguments contending that the San Francisco plan was unlawful.

Both opponents and supporters of the San Francisco plan agree that the ruling could have a widespread impact on health policy.

"This is a road map for state and local governments so they can step into the void and fill the vacuum that the federal government has left because of its inability to act in this area," City Attorney Dennis Herrera said.

In an editorial under a headline “A victory for San Francisco’s novel health plan,” the San Franciso Chronicle wrote, “It’s a welcome ruling that should clear the air on the legal front.”

On the other hand, Chris Reed, an editorial writer with the San Diego Union Tribune, wrote in his blog that, “The 9th is rewriting plainly written law. No employer mandate has ever withstood a federal court challenge until now. That's because ERISA says states can't tell employers what benefits to provide.”

Reed added that he would, “eat a printout of this blog item if the Supreme Court upholds the San Francisco law.”