SCOTUS Decision To Reject Challenge To San Fran’s Employer Mandate And National Reform

The city of San Francisco requires employers with “at least 20 workers that do not provide health care” to “give part of each employee’s wages to the city as a fee to help pay for the $200 million program.” The mandate is part of the city’s Healthy San Francisco program, which like national reform, seeks to expand universal coverage to lower income Americans.

For the last four years, the requirement has been the subject of a legal battle, with business groups accusing the City of overstepping its authority and violating the federal Employee Retirement Income Security Act (ERISA). The 9th U.S. Circuit Court of Appeals in San Francisco had ruled in favor of the city and yesterday the Supreme Court refused to take up the case, effectively preserving the City’s mandate. As Emma Sandoe observes, the decision marked an important victory not just for the city, but also for local rights and authority:

The fact that the Court defended state law over federal restrictions does not hurt the proponents of health reform and the constitutionality of national reform.  These are separate questions on federal versus state powers.  In fact, a repeal of the San Francisco employer mandate would have hurt the case for the Attorney Generals.  It would have been a blow to the health insurance regulatory power of the states, in favor of federal law. So in this case, conservatives hoping for a repeal of health reform should have been rooting for San Francisco. I imagine that image does not appear likely.

In other words, if the Supreme Court had accepted the case and then ruled that the power to mandate employers to pay a fee for failing to provide health insurance coverage rested with the federal government, it could have bolstered the fed’s standing in the cases challenging the individual insurance mandate.

The other point worth noting — and this is what makes this case so uncomfortable for conservatives — is that in San Francisco, the employer mandate has not resulted in the kind of job loss that Republicans are pinning on national reform’s far more limited free-rider requirements. Some restaurants have added “a four percent health care surcharge on menus” but there is no evidence that the provision is adversely affecting employment. In fact, “Neighborhood restaurants, where restaurants tend to be affordable and supported by locals, have generally received pretty good acceptance of the program,” while “restaurants in tourist and business travel areas are getting a lot more negative push-back.” Even so, they have not reported a decline in sales.