Federal court upholds San Francisco healthcare program

Ruling on a suit brought by the local restaurant association, the three-judge panel found that the year-old San Francisco Health Security Ordinance does not violate federal laws regulating employee benefit programs.

The law, which took effect Jan. 9, requires all for-profit employers with 20 or more workers to either offer health insurance, set aside funds in health reimbursement accounts or pay a fee to the city's Healthy San Francisco program. Nonprofit employers with more than 50 staffers are also covered.

Many San Francisco restaurants have been paying for the plan by tacking a surcharge of 3% to 6% on bills.

Proponents of the program, including Mayor Gavin Newsom, point to the law as a model for the state to provide healthcare for 7 million uninsured Californians.

"This is a pioneering program that is having tangible results and making a big difference in the lives of tens of thousands of workers," said Tim Paulson, executive director of the San Francisco Labor Council, a major booster of the plan. Healthy San Francisco, he noted, has already provided health coverage for 30,000 people who formerly had no access to routine medical and hospital care.

Paulson predicted that the San Francisco program, now that it has been upheld by the U.S. 9th Circuit Court of Appeals, could help spur Gov. Arnold Schwarzenegger and lawmakers into approving a statewide universal health insurance system.

In their ruling, the appeals court judges disagreed with arguments brought by the Golden Gate Restaurant Assn. and other employer groups that a law passed by Congress in 1974 precluded state and local governments from mandating employee benefit plans such as health insurance.

The restaurant association could not be reached for comment this morning.

marc.lifsher@latimes.com