GGRA May Petition U.S. Supreme Court to Determine Whether ERISA Preempts a San Francisco Ordinance Setting Healthcare Spending Mandates for Employers

[Source: Health Lawyers Weekly, January 25, 2008 - AHLA]

The Golden Gate Restaurant Association (GGRA) said January 21 that it has decided not to petition the full Ninth Circuit to overturn a unanimous panel decision allowing a San Francisco ordinance setting new healthcare spending mandates for employers to go into effect.

A three-judge panel of the Ninth Circuit in a January 9 order agreed to stay an earlier federal trial court decision that the Employee Retirement Income Security Act (ERISA) preempted the San Francisco Health Care Security Ordinance, which was scheduled to go into effect January 1, 2008 for large employers.

GGRA said it reached the decision because of the “minimal opportunity for success,” adding that the “emergency stay order was granted without a dissenting opinion, and the schedule for the appeal totals 3 ½ months which is a short time frame to the court.”

In addition to the appeals process before the Ninth Circuit, GGRA said it is researching the potential of petitioning U.S. Supreme Court Justice Kennedy to overturn the emergency stay order.

“We believe this case will most likely end up in front of the US Supreme Court, and take many more months to complete,” the group said.

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Further coverage:

- USA Today, "Universal Health Care Plans Up Against U.S. Law" [January 16, 2008]:

California, Colorado, Michigan and Minnesota have proposals pending that rely on partial funding by employers. The lower court ruling "raises doubt with regard to all of the state health reform proposals," says Atlanta attorney John Hickman, an expert on the federal law.

If the 9th U.S. Circuit Court of Appeals ultimately rules in the city's favor, the case may end up before the U.S. Supreme Court, says Phyllis Borzi, a George Washington University health policy professor.

That's because last January, the 4th U.S. Circuit Court of Appeals reached the opposite conclusion over a Maryland law. That law charged very large employers a fee if they did not spend 8% of payroll on health care, essentially affecting only Wal-Mart. The appeals court ruled the measure violated federal law.

If the appeals courts disagree, "it sets up a conflict, which is the classic pathway to having the Supreme Court resolve it," Borzi says. A similar law in Suffolk County, N.Y., was rejected by a lower court in July; the county decided not to appeal.


- AHLA, Health and Life Sciences Law Daily, January 23, 2008:

The AP (1/22, Woodward) reports that the Washington "state Senate's healthcare chairwoman unveiled Monday an ambitious universal healthcare plan, bankrolled by payroll taxes, that she hopes to implement by 2010." Sen. Karen Keiser (D-Kent) modeled the Washington Health Partnership "after a $15 billion program proposed in the Wisconsin Legislature." In the version proposed for Washington, new taxes would be levied "on businesses and workers," with proceeds extending "health benefits to all Washingtonians not covered by a federal program." Workers would pay between a two and four percent tax on payroll, while employers would pay between nine and 12 percent. The plan calls for residents to "get a voucher to enroll in their choice of private health networks, which would compete to provide the benefits called for by a state administrative board."