With Pretzel Logic, Restaurant Owners Attack San Francisco Health Care Law

by Mike Hall, Mar 23, 2009

Talk about twisted logic. A group of San Francisco restaurant owners wants the U.S. Supreme Court to block the city’s pioneering health care program because it somehow threatens national health care reform. On top of that, the Golden Gate Restaurant Association cites the recently passed American Recovery and Reinvestment Act to back up its claims.

The San Francisco health care ordinance, which was passed by the city and county Board of Supervisors in July 2006, has been in effect for more than a year. It provides coverage for 80,000 mostly low-wage workers. The program offers comprehensive health care services to uninsured San Franciscans and their employers at a reasonable cost, with subsidies for small- and medium-size businesses and low- and moderate-income individuals. It splits the costs among employers, employees and the city.

To prevent employers from eliminating coverage, the San Francisco health care initiative establishes a minimum health care spending requirement for businesses in the city, depending on the number of employees. If a business does not provide health coverage, it must pay into a fund that provides coverage.

Led by the restaurant group, many San Francisco business owners have waged a legal battle against the health care program. In September, a three-judge panel from the U.S. Court of Appeals for the Ninth Circuit ruled against the group when it found the health care program does not violate the federal law that regulates employee benefits, the Employee Retirement Income Security Act (ERISA).  Earlier this month, the court denied a review petition.

According to the Daily Labor Report (subscription required), the restaurant group then filed for an emergency stay, claiming the appeals court ruling upholding the city ordinance threatens the model for federal health care reform envisioned by the Obama administration and will likely be overturned. The DLR reports the restaurant group argues that the economic recovery package:

represents the government’s recognition of a national interest in employer-provided health care. The Ninth Circuit’s decision, it said, threatens that national interest by posing a “significant obstacle to nationally uniform benefit plan administration.”

Deputy San Francisco City Attorney Vince Chhabria says:

The alleged emergency is that restaurants will have to continue providing health care benefits during that process. It is difficult to understand how this is an emergency, given that the law has been in effect for more than a year now. It is also difficult to understand how this is an emergency, given that the restaurants are passing the costs on to their customers, and their customers are very happy to know that the people serving and preparing their food are getting health care as a result.

The San Francisco Labor Council and city unions were instrumental in both winning passage of the health care program and the legal battles. The city says more than 36,000 people already have received basic medical care under Healthy San Francisco. The vast majority are low-wage workers in service, retail and restaurant jobs whose employers do not provide health care coverage and who cannot afford to purchase it on their own.

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