Not everyone recognizes that we have a universal health care plan in this country-- approved and in operation in the city of San Francisco. Since it went into effect this year, it has been enrolling residents at a rate of 600 per week with the goal of covering everyone in the city up to 500% of the poverty line (about $100,000 per year for a family of four) by early 2009.

The good news is that the Ninth Circuit Court of Appeals on Tuesday upheld the law after a challenge by the business lobby that it violated federal ERISA benefits law, because employers not providing health care for their employees are required to pay $1.17 to $1.76 per hour to the city in order to cover their employees' costs under the city-provided health care plan. In Golden Gate Rest. Ass'n v. San Francisco upheld these employer responsibility provisions as in compliance with federal law.

The court emphasized that "state and local laws enjoy a presumption against preemption" when they operate in areas of traditional state concern.  And as the Court noted, provision of health services "has long been the province of state and local governments." 

The Court distinguished the San Francisco law from a Maryland law, which was held preempted by ERISA because it had required very large employers to spend 8% of their total payroll on health insurance or pay the same amount to the state.  Whereas the Maryland law gave employers and their employees nothing in return for those fees paid to the state, the San Francisco law enrolls all uninsured employees for whom fees are paid in the city health plan, giving employers and their employees a clear benefit for the fees.  For this reason, the Ninth Circuit ruled that the San Francisco plan was not an attempt to force employers to provide an ERISA health care plan but a reasonable regulation with clear benefits for employers and city residents.  This is supported by the fact that 950 employers in the city have already enrolled their employees in the city health plan.  

The court decision is also good news for the Massachusetts health plan, since that plan also includes a more modest employer responsibility provision and the state has just increased the funds it is collecting from employers to assure full funding for its program.  The Ninth Circuit Court of Appeals also provides far clearer guidelines for all legislators and advocates working to create "health care for all" plans that include employer responsibility components.