Monday, October 12, 2009

Efforts to block San Francisco health reform delayed

As we await tomorrow’s Senate Finance Committee vote on the Baucus health reform proposal, here’s an update on the progress of legal maneuvering intended to block the employer mandate portion of a local reform initiative: the Healthy San Francisco plan.

Enacted in 2006, San Francisco’s Health Access Plan uses a combination of public funding and mandatory employer contributions to provide coverage for uninsured working people of low or moderate incomes.

The plan survived initial court challenges by employer associations (and the Bush Administration) and started collecting required employer contributions in January 2008. The plan’s opponents didn’t give up, though: they asked the Supreme Court to overturn the Ninth Circuit’s ruling in favor of the City (Golden Gate Restaurant Ass’n v. City and County of San Francisco, 546 F.3d 639 (9th Cir. 2008). Plan opponents were perhaps hopeful that the High Court’s views would align more closely with those of the Fourth Circuit, which held in Retail Industry Leaders Association v. Fielder, 475 F.3d 180 (4th Cir. 2007) that ERISA preempted a Maryland employer mandate. The Fourth Circuit concluded that the Maryland law effectively forced employers to restructure their ERISA plans. (The Ninth Circuit tends to be liberal, the Fourth Circuit conservative.)

A decision from the High Court was expected this month, but the Court’s order last week didn’t offer either side of the dispute any certainty.

In effect, the Supreme Court decided not to decide whether to decide or not. Instead, it asked the Obama Administration to join the fray: does Obama’s Solicitor General agree with the Ninth Circuit’s conclusion that the San Francisco employer mandate does not impermissibly regulate an employer benefit plan? Or, does ERISA preempt the employer mandate, as argued by Golden Gate Restaurant Association (and the Bush Labor Department). The court won’t decide whether to hear this case until the Solicitor General weighs in.

Why the delay? Well, as observers point out, it’s not uncommon for the Court to seek the current Administration’s opinion, especially in situations where justices have doubts about agreeing to hear a particular case. In this case, though, the Court may be awaiting the outcome of the federal health care debate. If final legislation amends ERISA in a way that clarifies preemption disputes (or provides a federal employer mandate, or provides preemption waivers for state-based legislation), then the Court may decide that the issue has been resolved and refuse to hear the case.

For more on ERISA preemption and health care reform, see here. For one perspective on whether Healthy San Francisco is on track to achieve its goals, see here.


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