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New San Francisco Health Insurance Initiative

San Francisco Mayor Ed Lee announced on Friday, July 17, 2015, a new program to provide additional subsidies for low and middle income San Franciscans to purchase health insurance through the Covered California marketplace. 

The program, which is expected to become effective at the beginning of next year (2016), will use funds provided by employers pursuant to San Francisco's Health Care Security Ordinance (HCSO) to subsidize employee insurance premiums. The "City Option" under the HCSO allows San Francisco employers with more than 20 employees to pay a fee to the city rather than provide health insurance to its employees. The city then uses the fees to reimburse employees of the participating companies for their medical expenses. At present, about 900 companies  participate in the City Option program, and those companies employ approximately 3000 persons.

The purpose of the new initiative announced by the mayor is to leverage the subsidies for health insurance provided under the Affordable Care Act (ACA) by using funds from the City Option program to provide additional subsidies to San Francisco low and medium-income employees who face the very high costs of living applicable in San Francisco.

The subsidies will be available only to employees of companies who participate in the City Option program AND who purchase their health insurance in the Covered California marketplace. To be eligible employees must both work and reside in San Francisco. The income eligibility cut-off is $58,000. Eligible employees may still choose to receive reimbursement for medical expenses as contemplated by the original City Option program, but the city hopes to encourage employees to use the premium subsidy option rather than the reimbursement option, and thereby avoid federal tax penalties for failing to obtain health insurance under ACA's individual mandate. 

If you are a small business owner, whether in San Francisco or not, or if you are an individual with questions about your health insurance options, please contact Pfeifer Insurance Brokers. We can help.

Alex Pfeifer
Pfeifer Insurance Brokers
650 762-8070
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