HCSO Employer Annual Reporting Form Due May 1

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Health Care Security Ordinance Employer Annual Reporting Form Due May 1

By Karen Hooper | Published March 28, 2023

Executive Summary

The San Francisco Office of Labor Standards Enforcement (OLSE) has opened the Health Care Security Ordinance (HCSO) Employer Annual Reporting Form (ARF) website. All covered San Francisco employers must submit the ARF by May 1 (April 30 falls on a Sunday).

The ARF website includes the report covered employers must complete as well as instructions, previews, and educational video overviews.

Which Employers are Required to Complete the ARF?

A covered employer is defined as an employer who:

employed one or more workers within the geographic boundaries of the City and County of San Francisco;
were required to obtain a valid San Francisco business registration certificate pursuant to Article 12 of the Business and Tax Regulations Code, and
employed 20 or more persons worldwide (for profit) or a nonprofit organization that employed 50 or more persons worldwide.

Note: The ARFs for 2019 (April 2020) and 2020 (April 2021) were cancelled because of the pandemic. It returned to normal schedule for the 2021 ARF last year (April 2022).

Where Can Employers Find Information on the ARF?

The ARF is now available on the HCSO website along with instructions, previews of the reporting entries, and a webinar:

What Information Do Employers Need to Complete the ARF?

Seven digit San Francisco Business Account Number
Total number of employees in each quarter (nationwide)
Number of employees covered by the HCSO in each quarter (only employees who work in SF)
Total health care expenditures made for each quarter of 2022 including:
- Total quarterly payments for health coverage (medical, dental, vision)
- Total quarterly contributions to the SF City Option
- Total quarterly employer contributions to HSAs
Fair Chance Ordinance reporting (related to hiring and employment process for individuals with arrest and conviction records) for the 2022 calendar year:
- The number of part-time, temporary, seasonal employees and telecommuters who work within the geographic boundaries of San Francisco
- Information on whether the employment application forms for San Francisco jobs request arrest or conviction information
- Information on whether the company conducted background checks on conviction and or arrest records before a live interview (including a telephone interview)
- Information on whether the company conducted background checks on conviction and or arrest records before making a conditional offer of employment
- Number of people hired with a conviction history
- Indicate whether the company is covered by some aspect of the background check provisions of the FCO. See the instructions for further information.

Quarterly Expenditures are Also Due by May 1, 2023

Under the HCSO, Covered Employers with 20 or more employees (50 or more employees for nonprofits) in any quarter are required to make a minimum level of health care expenditures for that quarter for any employees:

Who have been employed by the employer for at least 90 days,
Who have performed at least 8 hours of work in San Francisco,
And who do not meet any of the exemption criteria below.

For more details: 2023 San Francisco HCSO Expenditure Rates Released.

Don’t Forget about Remote Employees Working in San Francisco

Some employees have returned to the office full time, and others are still working remotely. Employers are not required to make expenditures for any employees who work outside of the geographic boundaries of San Francisco. For any employees who have returned to work part-time in San Francisco, employers will need to track the hours worked in San Francisco for the HCSO spending requirement. Employers still are required to make health care expenditures for any remote employees who live in San Francisco and work from home.

For more details: SF HCSO Compliance in the Work-From-Home Era.

Which Employees are Exempt or Excluded from Eligibility under the HCSO

There are five categories of exempt employees:

Employees who sign a waiver form and voluntarily waive their right to have employers make Health Care Expenditures for their benefit.
Employees who qualify as Managers, supervisors or confidential employees AND earn more than the applicable salary exemption amount.
Employees who are covered by Medicare or Tricare.
Employees who are employed by a non-profit corporation as a trainee in a bona fide training program.
Employees who receive health care benefits pursuant to the San Francisco Health Care Accountability Ordinance (HCAO)

More San Francisco HCSO Information

For more information on all of the HSCO requirements directly from the City, check out the San Francisco OLSE’s official HSCO website.

For more information from us, see our Newfront San Francisco Health Care Security Ordinance (HCSO) Guide.

Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship. Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).

The Author

Karen Hooper

VP, Senior Compliance Manager

Karen Hooper, CEBS, CMS, Fellow, is a Vice President and Senior Compliance Manager working closely with the Lead Benefit Counsel in Newfront's Employee Benefits division. She works closely with internal staff and clients regarding compliance issues, providing information, education, and training.