More than 100,000 San Francisco employees can now access funds contributed by their employers under the San Francisco Health Care Security Ordinance (HCSO) to pay for necessary expenses during COVID-19, including food, rent, mortgage payments, and utilities. Previously, the funds were only available for healthcare expense.

Healthcare Security Ordinance

The HSCO established several healthcare-related obligations for employers with employees in San Francisco. Under the HCSO, for-profit businesses with 20 or more employees companywide (or nonprofits with 50 or more employees companywide) must satisfy minimum healthcare spending requirements on behalf of covered employees.

As an alternative to paying a portion of the premium for health, dental, and/or vision insurance, employers can satisfy their obligation by making payments to the SF City Option on behalf of covered employees. Under the SF City Option, employees on whose behalf such contributions have been made may be offered Medical Reimbursement Accounts (MRAs), which these employees can access to be reimbursed for eligible medical expenses.

Many employees on whose behalf contributions have been made, though, do not claim all of the money in their MRA. Thus, at present, these MRAs collectively have a $138 million balance, averaging $1,300 per employee.

Mayoral Declaration Expanding Authorized Uses of MRA Funds

On April 28, 2020, in response to public pressure, San Francisco Mayor London Breed announced an immediate expansion of the authorized uses of MRA funds. In addition to healthcare expenses, during the pandemic MRA funds can be tapped to cover "necessary expenses," including food, rent, mortgage payments, and utilities.

Thus far, there is no requirement that employers notify employees of this opportunity. The SF City Option program will be reaching out to eligible employees to inform them of their right to request a one-time disbursement of funds in their accounts.

In the meantime, employees can initiate contact with the SF City Option. The City cautions that employees should protect their personal information and that the City will not request banking or social security information.

The Mayor's declaration comes in addition to a February 25, 2020, proclamation cancelling the requirement that employers submit the 2019 Annual Reporting Form for the Health Care Security Ordinance and the Fair Chance Ordinance.



The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.

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