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DPH work group proposes narrower HCAO floor, recommends Nov. 1 vote
Summary
A DPH work group recommended raising some minimums and clarifying preventive coverage in the Healthcare Accountability Ordinance; staff estimated roughly 26 covered vendors and suggested follow-up data on how many workers are affected before the Nov. 1 vote.
Patrick Chang, a senior planner with the Department of Public Health, presented a package of recommended updates to the city—s Healthcare Accountability Ordinance (HCAO) that the commission will vote on at its Nov. 1 meeting. The work group sought to broaden plan choice for employers while protecting employees from large out-of-pocket cost exposure.
Chang said the group recommended raising the out-of-pocket maximum from $6,350 to $6,850 (the 2016 ACA ceiling), increasing the medical deductible from $1,500 to $2,000 while requiring employers to provide first-dollar coverage through an employer-funded HRA or an HSA, lowering the prescription deductible to $250, and allowing a coinsurance level up to 30% with routine copays raised to $45. He also proposed clarifying language that preventive services designated under the ACA are covered at no charge.
Why it matters: the HCAO sets minimum health benefits for employers with city contracts or leases; changing the floor affects affordability and access for workers on city-funded contracts. Chang told the commission that 26 vendors paid into the program last year and that combined in-lieu fees and settlement dollars totaled roughly $1.3 million, but he cautioned the department currently lacks a single repository to count exactly how many employees are covered across city contracts.
Nonprofit and labor stakeholders who participated in the work group supported the balance struck in the recommendations. Debbie Lerman of the San Francisco Human Services Network said the set of changes preserves plan choice and affordability for nonprofit employers: "We think these proposed standards meet those goals." Emma Gerard of SEIU, representing workers who urged reductions in deductibles, told the commission the employer-funded first-dollar HRA/HSA arrangement addresses that barrier.
Commissioners pressed staff for follow-up data before the Nov. 1 vote, including (a) a clearer estimate of the number of employees affected, (b) the extent to which HCAO protections overlap with ACA coverage and state rules, and (c) evidence about how benefit design changes alter health-seeking behavior. Chang agreed to research those items and return with more quantified impact analysis at the next hearing.
The commission did not vote on the ordinance today; the item was discussed and set for a formal vote on Nov. 1.
