03/26/2008
Forcing employers to provide healthcare benefits they can't afford will not fix the healthcare crisis
CONTACT: Melissa Sharp, 202-314-2068, or Michelle Orrock, 916-448-9904
Washington, D.C.--The National Federation of Independent Business, the nation's leading small business organization, today joined the legal fight to overturn San Francisco's Health Care Security Ordinance. This law, enacted by the city in 2006, mandates that all private employers with more than 20 employees pay an assigned amount of money towards employee healthcare or pay the city a fee based on the number of employees and hours worked.
This ordinance has been legally challenged in the case Golden Gate Restaurant Association v. City and County of San Francisco. NFIB's Small Business Legal Center filed a friend of the court brief in this case urging the court to strike down this law because it is unconstitutional under the Commerce Clause and is preempted by the Employee Retirement Income Security Act.
"Forcing employers to pay for healthcare benefits they simply can't afford is not the solution to our nation's healthcare crisis," said Karen Harned, executive director NFIB Small Business Legal Center. "Due to the employer mandate included in San Francisco's Health Care Security Ordinance, this law poses an unconstitutional burden on interstate commerce and will unjustly harm business owners in San Francisco. The ordinance also violates ERISA's preemption provision which prohibits state and local laws from interfering with employer-sponsored health and welfare plans. For these reasons, NFIB strongly believes that San Francisco's Health Care Security Ordinance should be invalidated."
In its Economic Impact Report published on June 23, 2006, the San Francisco Office of Economic Analysis confirmed that some business closures are likely as a result of this ordinance. The report also acknowledged that most of the burden for funding the ordinance will fall on the shoulders of those businesses that employ between 20 and 49 employees. Further the report said that if those businesses are not able to pass along the increased healthcare costs to consumers, some employers will be forced to either cut jobs or close.
"This ordinance is extremely unfair to small employers, the real job creators in California and across the country," said John Kabateck, NFIB/California executive director. "If this ordinance is upheld, small employers will be forced to make difficult decisions about whether to lay off staff, increase prices on consumers or if possible, move their business out of San Francisco. Hurting small employers in this manner is simply unacceptable and should not be permitted by our state or local laws."
While opposed to employer mandates that harm small business owners, NFIB is committed to working with policy leaders to address the healthcare crisis. NFIB recently launched the Solutions Start Here campaign. This nationwide campaign led by NFIB and its members, will develop the small business platform for healthcare reform. By working to engage and educate policymakers about the unique healthcare issues faced by small business, Solutions Start Here will drive and integrate the concerns and needs of America's small business community into the national health reform debate. When healthcare is fixed for small business, it's fixed for America. For more information visit www.FixedForAmerica.com.
