Targeting Employer Healthcare Contributions = Preemption
There has been a lot of comment about the decision in Golden Gate Restaurant Association v. City and County of San Francisco from a couple of days ago. In that case U.S. District Court Judge Jeffrey S. White ruled that ERISA preempts the San Francisco Health Care Security Ordinance which attempted, among other things, to mandate that a certain amount of money spent by San Francisco employers was used to provide healthcare benefits to their employees.
Chris Reed at the San Diego Union Tribune has followed closely attempts by California to enact healthcare reform. He's been skeptical about the ability of any state or local laws to withstand ERISA preemption. His comments on the case, and link to the decision, can be found here. Roy Harmon comments here. Professor Paul Secunda's take on the case is here at Workplace Prof blog. Stephen Rosenberg's observations can be found here. Finally, Paul's update on the position of the City of San Francisco is here. It has filed an emergency petition with the Ninth Circuit to stay the District Court ruling and allow the ordinance to go into effect as scheduled next week, including that portion of the ordinance that imposes the employer mandate.
I have to agree with most of those who have already weighed in that it's hard to see how this ordinance makes it through basic ERISA preemption analysis. It doesn't just indirectly affect the administration of employer provided healthcare coverage. The ordinance targets and substantively dictates how San Francisco employers provide healthcare benefits.
ERISA preemption jurisprudence is far from consistent or clear. But there is a raft of case law from the Supreme Court on down saying that state laws that dictate the substance of employer sponsored healthcare benefits are preempted by ERISA. The only exception is where those laws are restricted to the insurance industry. The San Francisco ordinance is not so limited.