San Francisco?s Universal Health Plan Could Bode Well for California

If California’s Senate and voters approve the state’s proposed universal healthcare plan, proponents say it’s likely to survive any legal challenges based on the federal Employee Retirement Income Security Act (ERISA).

That optimism stems from the Ninth U.S. Circuit Court of Appeals recent decision to allow the city of San Francisco to implement its universal health coverage plan while it appeals a federal judges’ decision barring it from mandating employers provide insurance to its employees or pay the city a fee to do so. California’s proposed health care plan also requires employers to provide health care coverage for its workers or pay the state a fee to do so.

Industry experts and state governments are closely watching California’s health care reform efforts, as the nation looks for ways to address the rising ranks of uninsured Americans. A ruling against San Francisco “would very likely frustrate state and local health care reform efforts throughout the nation,” City Attorney Dennis Herrera told the San Francisco Chronicle.

California Assembly House Speaker Fabian Nunez, who helped craft the state’s health care plan with Governor Arnold Schwarzenegger and Senate President pro Tem Don Perata, applauded the appeal court’s ruling. Opponents of the plan “now have one less rubber arrow in their quiver as they try to stop our historic effort to fix the broken system and make health care more affordable and accessible to the people of California,” said Nunez.

The appeals court decision simply lifted a stay on the implementation of San Francisco’s plan, and its final decision on a suit that seeks to halt universal healthcare in the city isn’t expected before the summer or fall. But the three-panel court said the city had a strong argument and a “strong likelihood of success on the merits” of the case. In the meantime, the appeal court’s decision makes thousands of the city’s uninsured eligible for coverage in a few months.

The court battle began when the Golden Gate Restaurant Association challenged the city’s plan, which requires private employers with at least 20 workers, and non-profit organizations with at least 50 workers to provide health coverage at a level set by the city. In December, U.S. District Judge Jeffrey White issued an injunction stopping the plan, ruling that the requirement violated ERISA, which prohibits state and local government from regulating employee benefits plans. Early this month, the appeals court said White misinterpreted the law that is intended to promote uniformity in health plans.