The San Francisco Health Care Security Ordinance (“HCSO”) minimum expenditure rates for 2025 have been released, and the HCSO Annual Reporting Form for calendar year 2024 is due on April 30, 2025.
Under the HCSO, covered employers must make minimum health care expenditures at the following rates for each hour worked by covered employees in San Francisco:
Employer Size | Number of Employees | 2024 Health Care Expenditure Rate | 2025 Health Care Expenditure Rate |
---|---|---|---|
Large | All employers with 100 or more employees | $3.51 per hour payable | $3.85 per hour payable |
Medium | Businesses with 20-99 employees Nonprofits with 50-99 employees |
$2.34 per hour payable | $2.56 per hour payable |
Small | Businesses with 19 or fewer employees Nonprofits with 49 or fewer employees |
Exempt | Exempt |
The hours payable under the HCSO for each employee are capped at 172 hours per month. Therefore, for 2025 the maximum required health care expenditure for a covered employee of a large employer is $662.20 per month ($3.85/hour x 172 hours). For a medium-sized employer, the maximum required expenditure for a covered employee is $440.32 per month ($2.56/hour x 172 hours).
Managerial, supervisory, or confidential employees who earn more than a specified amount are exempt from the minimum health care expenditures requirement under the HCSO. For 2024, the earnings threshold for these employees to be exempt from the HCSO is $121,372 per year (or $58.35 per hour). As of January 1, 2025, the new threshold will be $125,405 per year (or $60.29 per hour).
Covered employers must submit an online report each year that summarizes how they complied with the HCSO. The web-based HCSO Annual Reporting Form for the prior calendar year is typically available on the San Francisco Office of Labor Standards Enforcement (“OLSE”) HCSO website by April 1 and must be submitted by April 30. For example, the HCSO Annual Reporting Form for calendar year 2024 is expected to become available on the HCSO website by April 1, 2025, and is due by April 30, 2025.
Covered employers should ensure that they will be making the required minimum health care expenditures in 2025 at the new rates for employees in San Francisco and maintain records showing compliance with the HCSO requirements.
The 2025 version of the HCSO poster, which must be posted in all workplaces with covered employees, is expected to become available by December 2024. Covered employers should monitor the San Francisco HCSO website (linked below) to obtain and post the 2025 version of the poster by January 1, 2025.
Covered employers should also be prepared to submit the HCSO Annual Reporting Form for calendar year 2024 no later than April 30, 2025.
This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely
on any information contained herein without seeking the advice of an attorney or tax professional. © My Benefit Advisor. All Rights Reserved. CA Insurance License #0G33244
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