March 29, 2012 By
Annual Reports due April 30, 2012
As you know, San Francisco’s Health Care Security Ordinance (Healthy San Francisco) requires for-profit employers with 20 or more employees (and nonprofits with 50 or more employees) to spend a minimum amount on health care for covered employees and to report on these expenditures annually.
Employers with employees working in San Francisco (Covered Employers) must file an annual report to the City on its health care expenditures made for the employees working in San Francisco. Covered Employers must file the 2011 Annual Reporting Form (ARF) no later than April 30, 2012.
2011 Annual Reporting Form
Penalty Increase. Effective as of January 1, 2012, the penalty for failing to submit the ARF has increased to $500 per quarter.
The Process. Covered employers have the choice of completing the online PDF (see above) or requesting the ARF be mailed to them by calling OLSE at (415) 554-7892. The ARF must include the employer’s Business Account Number, Ownership Name, and Mailing Address or face possible penalties and other corrective action.
- The Form. San Francisco’s Office of Labor Standards Enforcement (OLSE) has just released an updated 2011 Annual ARF. To obtain a copy, click:
The 2012 Changes
- New Notice Obligation. Pursuant to the November 2011 Amendment to HCSO (see our Updates 2011-11 and 2012-2 for more details), businesses with 20 or more employees and nonprofit organizations with 50 or more employees must now post the 2012 Official OLSE Notice at every workplace or job site where there is an HCSO eligible individual.
- New Surcharge Rules. For employers that impose a surcharge on customers to cover, in whole or in part, the costs of the HCSO spending requirement.
New HRA Rules. For businesses that utilize HRAs to satisfy, in whole or in part, the HCSO spending requirement, qualified contributions must meet the following follow criteria:
- Covered employers will be required to report two new pieces of data to the OLSE during the annual reporting process: 1) the amount of money collected from the surcharge for employee health care and 2) the amount of money spent on employee health care.
- If the amount collected from the surcharge is greater than the amount spent on employee health care, the covered employer must irrevocably pay or designate an amount equal to that difference for health care expenditures for its employees.
2012 Employer Expenditure Rates. The health care expenditure rates for 2012 are as follows:
- The contributions must be reasonably calculated to benefit the employee;
- The contributions must remain available to the employee for a minimum of twenty-four months from the date of the contribution;
- The employee must receive a written summary of each contribution within 15 days of the date of the contribution;
- Any HRA funds available at the end of 2011 must roll-over to 2012; and
- pon separation, employees must receive a written summary of their account within 3 days of their separation and the funds must remain available for a minimum of 90 days.
2012 Annual Salary Exemption. An employee who is a manager, supervisor, or confidential employee and who earns at or above an annual salary of $84,051 (or $40.41/hour) in 2012 is exempt from coverage under the HCSO. (The 2011 annual salary amount was $81,450, or $39.16/hour.)
- Large employers (100+ employees) $2.20/hour
- Medium-sized employers (20-99 employees) $1.46/hour
- mall employers (1-19 employees) Not covered
IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication, unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.
Copyright © 2012 Kutak Rock LLP • All Rights Reserved. Reprint with permission only. This legislative update is published as an information source for our clients and colleagues. It is general in its nature and is no substitute for legal advice or opinion in any particular case.
Tags: Healthy San Francisco