Employers subject to San Francisco’s Health Care Security Ordinance (HCSO) are required to annually report their health care expenditures to the Office of Labor Standards Enforcement (OLSE). The 2022 Employer Annual Reporting Form, together with Instructions, is now available on OLSE’s website.

The form is due by May 1, 2023. Employers who fail to timely submit the annual report could be subject to penalties of $500 for each quarter the violation occurs.

As background, a business is subject to the HCSO if it engages in business within the City of San Francisco and employs 20 or more employees per week. Nonprofit employers with fewer than 50 employees, and small employers with fewer than 20 employees, are exempt from the HCSO. For purposes of employer size, all individuals performing work for compensation for the employer should be counted.

For 2023, the applicable health care expenditure rate for large businesses employing 100-plus employees is $3.40 per hour; the rate for businesses with 20-99 employees and nonprofits employing 50-99 employees is $2.27 per hour. A covered employee is one who has been employed for more than 90 days and regularly works at least 8 hours per week in San Francisco.

Employers who had self-funded health plans (medical, dental, or vision) in 2022 must calculate the value of those plans and pay any necessary top-off payments to employees by February 28th, 2023. The OLSE provides instructions to assist an employer in their calculations for making this determination, as well as a sample letter to provide to their employees to explain how the calculation is made.

The OLSE provides a new 2023 HCSO poster for employers to download or request by mail. This workplace poster must be placed at each job site or workplace in a location where employees can easily read it.