By Jason Dearen, Writer The Associated Press September 30, 2008
San Francisco -San Francisco's landmark universal health care program can continue to operate, after a federal appeals court ruled Tuesday that it does not violate federal law. The unanimous ruling by a three-judge panel of the 9th U.S. Circuit Court of Appeals overturned a lower court decision that the program, dubbed Healthy San Francisco, had placed an undue financial burden on struggling businesses.
Healthy San Francisco is the first plan in the country to offer universal coverage, and requires companies with at least 20 workers to provide health care or pay the city a fee to help offset the program's estimated $200 million price tag.
The Golden Gate Restaurant Association sued the city after the Board of Supervisors approved the program in 2006, arguing that its requirement that businesses pay a fee violated a federal law that gives employers a choice in how to provide health coverage.
In its ruling, the panel stressed that it was not ruling on the wisdom of the Healthy San Francisco plan, but only the legality of the mandatory employer fees under the federal Employee Retirement Income Security Act, or ERISA.
"We are asked only to decide whether ERISA pre-empts the employer spending requirements. We hold that it does not," Judge William A. Fletcher wrote in the court's opinion.
Kevin Westlye, executive director of the Golden Gate Restaurant Association, said the group planned to appeal Tuesday's ruling. It can appeal directly to the U.S. Supreme Court, or ask the full appeals court to review the ruling.
"If this stands, many counties and states will pass their own employer expenditure rulings, going against why Congress passed ERISA in the first place," Westlye said.
Westlye said he agreed with the need for a universal health care plan, but that it could be funded by a quarter-cent sales tax increase instead of employer fees.
The U.S. Supreme Court ruled in February that the Healthy San Francisco program could proceed while the appeals court considered its legality.
Currently, more than 29,000 people are enrolled, according to the latest city statistics. Previous estimates put the city's uninsured population at about 82,000.
City Attorney Dennis Herrera, whose office argued the case for the city, said the court's ruling proves that local governments can navigate complex federal laws to provide improved health care to its residents.
"This is a road map for state and local governments so they can step into the void and fill the vacuum that the federal government has left because of its inability to act in this area," Herrera said.
Labor advocates also hailed the ruling as an important first step in paving the way for health care reform, a key national issue in an election year.
"No one thinks that San Francisco on its own is going to solve the health care problem in the city or the nation," said Ken Jacobs, chair of the University of California, Berkeley's Center for Labor Research and Education who worked with San Francisco officials on the program. "What San Francisco has shown, however, is that it's a matter of will, it can be done."
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