Restaurant Association Files Suit To Block San Francisco Universal Health Care Law, Says Federal Law Prohibits Employer Health Insurance Mandate

The Golden Gate Restaurant Association, a culinary trade group with more than 800 members in San Francisco, has filed a lawsuit against the city to block part of an ordinance that requires businesses with 20 or more employees to contribute to the cost of workers' health care, the New York Times reports (Marshall, New York Times, 11/14). The ordinance is scheduled to take effect in July 2007 and is designed to provide health care coverage to the 82,000 uninsured San Francisco residents. The cost of the plan is expected to be $200 million annually and will be funded by employers, taxes and individual plan premiums (Egelko, San Francisco Chronicle, 11/10). Businesses are expected to contribute $30 million to $40 million per year toward the cost of services provided by hospitals, doctors and health networks. In its suit, filed in Federal District Court in San Francisco, the restaurant association argues that certain parts of the ordinance are pre-empted by federal law under the Employee Retirement Income Security Act. According to the Times, the lawsuit "asks the court to settle a fundamental dispute: whether the national standards for benefit and pension plans described by ERISA apply to and trump provisions for health benefits established by the San Francisco ordinance." The association is seeking an injunction to block the employer contribution requirement "without disturbing all other lawful parts of the ordinance," the lawsuit states (New York Times, 11/14). GGRA Executive Director Kevin Westlye in a statement said, "Health care is everyone's responsibility, not just the employers," adding that the association has been working for a year to find an alternate source of funding for the mandate (AP/USA Today, 11/14). Westlye said that while the association supports the intent of the ordinance, "there are no cost controls" and "[m]any businesses simply cannot afford it." Matt Dorsey, a spokesperson for the San Francisco attorney's office, said, "We believe the San Francisco legislation was narrowly tailored to avoid pre-emption by ERISA" (New York Times, 11/14).