Health Commission reviews proposed changes to Health Care Security Ordinance amid public calls to close HRA 'loophole'
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Summary
DPH briefed the commission on Supervisor Campos’ proposed amendments to the Health Care Security Ordinance to make employer health‑care expenditures irrevocable and create a Covered San Francisco subsidy; public speakers and labor groups urged closing an HRA reclamation loophole they say allowed employers to pocket tens of millions.
The San Francisco Health Commission reviewed proposed amendments to the Health Care Security Ordinance introduced by Supervisor David Campos that would (1) require employer health‑care expenditures under the ordinance to be irrevocable and (2) replace the current city option with a Health Care Access Assistance Program that includes a new Covered San Francisco subsidy to help low‑ and moderate‑income workers buy coverage on Covered California.
Colleen Chavla, deputy director for policy and planning at the Department of Public Health, walked commissioners through the ordinance’s two major changes and three program elements of the proposed HCAAP: Covered San Francisco (a new premium subsidy option), continued operation of Healthy San Francisco for those ineligible for exchange subsidies, and health care access accounts (medical reimbursement accounts). Chavla said the proposed implementation date of Oct. 1, 2014 would be difficult to meet and that Covered California had indicated it could not support direct integration until 2016, prompting DPH to explore alternative mechanisms with local health plans and foundations.
Hillary Roman, legislative aide to Supervisor Campos, said the ordinance is intended to give DPH discretion to design the subsidy program but stressed urgency to close what she described as a long‑standing loophole in health reimbursement accounts (HRAs). Roman and numerous labor and community speakers cited Office of Labor Standards Enforcement figures saying employers reclaimed the large majority of HRA balances — leaving only about 24–25% of those funds reaching workers — and they presented a 2013 figure of roughly $93.9 million that they said was pocketed by employers rather than used for worker health care.
Public commenters representing labor unions, community clinics and worker groups urged the commission to support the concept of Covered San Francisco and to press DPH and the Board of Supervisors to close the HRA loophole so funds intended for health care actually reach workers. The San Francisco Chamber of Commerce and other business representatives urged more negotiation with employers and cautioned about federal constraints and the complexity of implementation.
DPH said many of the task‑list items related to HCAAP could be funded through existing MHSA allocations, but that the HIE piece and the detailed design for Covered San Francisco would require additional program and financial modeling. Greg Wagner, DPH chief financial officer, said shifting eligible people to insurance could reduce some general‑fund burden over time but that savings are mixed and depend on utilization and enrollment patterns.
Commissioners asked DPH to continue discussions with Covered California, local health plans and foundations, to model candidate subsidy levels and to return with a progress report and funding breakdown. The commission did not take a formal vote on the ordinance itself; it asked DPH for an update at the next meeting and for periodic progress reports as negotiations proceed.
