San Francisco updates contractor-tenant health plan standards and pay rates


HCAO compliance requires a services contract with the City and County of San Francisco, or a lease with SFO or the Port of San Francisco, and includes subcontractors and subtenants under the contract or lease. The contract or lease must be for at least $25,000 per year ($50,000 for nonprofit employers). Covered employers include for-profit employers with 20 or more employees anywhere in the world (50 or more employees for non-profit employers). A covered employee includes any employee working for a covered employer on an HCAO-covered contract or rental property for at least 20 hours per week, anywhere in the United States.

Contractors and tenants in San Francisco must provide free minimum health benefits to employees covered by the HCAO and HAO.

HCAO requirements should not be confused with the San Francisco Health Care Safety Ordinance (HCSO), applicable to employees working in the city and county of San Francisco (including remote workers). For more information on the HCSO, see San Francisco Health Spending Rates Released for 2023 (August 8, 2022).

The San Francisco Department of Public Health’s new HCAO minimum standards require plans to cover all services listed in California’s current Essential Health Benefits (EHB) Benchmark Plan (CA Benchmark Plan). The standards apply to employee-only coverage and do not require dental or vision benefits. The Office of Labor Standards Enforcement (OLSE) also released an updated poster, which employers were required to display prominently at every job site in San Francisco for several years.

The changes to the 2023 standards relate to cost sharing: co-insurance, co-payments, deductibles and out-of-pocket caps. Non-annual plans must not comply with the 2023 standards until the first day of the plan year that begins in 2023. See the 2023 standards table below.

Employers must annually obtain signed acknowledgment from covered employees of an HCAO Know Your Rights Notice (also recently updated). Employees may waive their coverage rights by signing an approved waiver form. Employers must retain notices and waivers for four years after the applicable contract expires. All notices and posters must be available in English, Spanish, Chinese and any other language spoken by at least 5% of employees in the workplace or on the job site. Templates are also available in Filipino.

Table of standards 2023

In addition to covering EHB, an entrepreneur’s health plan must comply with these 16 standards (changes are in progress). bold):

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