San Francisco HCSO Expenditure Rates for 2025

San Francisco HCSO Expenditure Rates for 2025

Several years ago, the City and County of San Francisco passed the Health Care Security Ordinance (“HCSO”) requiring covered employers to contribute to the health care costs of its covered employees, either through private means, or through “Healthy San Francisco”. An employer is subject to the HCSO if it employs one or more workers within the geographic boundaries of the City and County of San Francisco, is required to obtain a valid San Francisco business registration certificate, and is a for-profit business with 20 or more workers, or a nonprofit organization with 50 or more workers. A covered employee is one who has been employed for more than 90 days and who regularly works at least 8 hours per week in San Francisco.

Each year these health care expenditure amounts are adjusted. These expenditure rates do not apply to businesses with 19 or fewer employees, or to nonprofits with 49 or fewer employees. In determining employer size, all individuals performing work for compensation both in and outside of San Francisco should be counted, regardless of whether the individual is full-time, part-time, temporary, or seasonal.

The required minimum health care expenditure is calculated by multiplying the total number of “hours paid” to that employee by the applicable expenditure rates, which for 2025 and 2024 are as follows:

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An employee who is a manager, supervisor, or confidential employee and who earns at or above an annual salary of $121,372 (or $58.35 per hour) in 2024 is exempt from coverage under the HCSO. For 2025, the new threshold will be $125,045 per year (or $60.29 per hour).

Employers who have self-funded health plans (medical, dental, or vision) must calculate the actual value of their plans (using either premium amounts or claims paid) to determine if the expenditures meet or exceed the required health care expenditure rate. If the employer’s annual spend fell short of the HCSO expenditure rate, the employer must make top-off payments for employees enrolled in these plans by the end of February of the following year.

Employers are required to annually report their health care expenditures to the Office of Labor Standards Enforcement (OLSE) by April 30, each year. Employers who fail to timely submit the annual report could be subject to penalties for each quarter the violation occurs.

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San Francisco HCSO Expenditure Rates for 2025https://www.cbiz.com/Portals/0/Images/GettyImages-1471886655-5.jpg?ver=Z4Wm-dUQKpLdtCVB9BdsGw%3d%3dhttps://www.cbiz.com/Portals/0/Images/GettyImages-1471886655-4.jpg?ver=0emWIaRvEGHaOaZEu6XOLQ%3d%3dThe health care expenditure amounts for San Francisco’s Health Care Security Ordinance have been adjusted for 2025. These expenditure rates do not apply to businesses with 19 or fewer employees, or to nonprofits with 49 or fewer employees.2024-09-04T17:00:00-05:00The health care expenditure amounts for San Francisco’s Health Care Security Ordinance have been adjusted for 2025. These expenditure rates do not apply to businesses with 19 or fewer employees, or to nonprofits with 49 or fewer employees.Regulatory, Compliance, & LegislativeEmployee Benefits ComplianceNo