Ninth Circuit upholds San Francisco health care ordinance against ERISA challenge

[JURIST] The US Court of Appeals for the Ninth Circuit [official website] on Tuesday upheld [decision, PDF] a San Francisco city ordinance passed in July 2006 that assists in the health care of nearly 73,000 uninsured workers and residents. The San Francisco Health Care Security Ordinance [text] requires all "covered employers" to pay up to a certain amount of medical care for certain employees. In November 2006, the Golden Gate Restaurant Association (GGRA) [advocacy website] filed a complaint against the city, complaining that the ordinance was preempted by section 514(a) of the federal Employee Retirement Income Security Act (ERISA) [text], which says that ERISA provisions supersede any state law relating to any employee benefit plan governed by ERISA. A district court judge in December agreed, entering judgment [text, PDF] for GGRA. The Ninth Circuit reversed, holding:

[T]he Ordinance does not regulate benefits or charges for benefits provided by ERISA plans. Its only influence is on the employer who, because of the Ordinance, may choose to make its required health care expenditures to an ERISA plan rather than to the City...The [Ordinance's] spending requirements do not establish an ERISA plan; nor do they have an impermissible connection with employers' ERISA plans, or make an impermissible reference to such plans.
The ordinance also implements a Health Access Plan (HAP) to allow uninsured San Francisco residents to obtain health care from certain participating city hospitals and clinics, which was unchallenged by GGRA. The San Francisco Chronicle has more.

In January 2007, a panel of the US Court of Appeals for the Fourth Circuit [official website] ruled [opinion, PDF; JURIST report] that ERISA preempted the Maryland Fair Share Health Care Fund Act [text, PDF], which required Wal-Mart to spend the equivalent of eight percent of each individual store's payroll on employee health insurance. Maryland Attorney General Douglas F. Gansler [official profile] said in April that Maryland would not challenge that decision.

 

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