2024 SF HCSO Annual Report Due May 2, 2025

The San Francisco Health Care Security Ordinance (HCSO) requires that employers submit the employer Annual Report Form by May 2, 2025. The report must be submitted to the Office of Labor Standards Enforcement (OLSE), the organization with oversight over the HCSO ordinance.

The purpose of the Annual Report Form is to provide OLSE with a snapshot of each employer’s compliance with this ordinance. The penalty for failing to submit the form by the deadline is $500 per quarter.
 

Reporting Details

The reporting requirement includes basic business data as well as data to clarify Covered Employer status. In addition, the following data points are requested:

• Number of individuals employed in each quarter of 2024
• Number of employees covered by HCSO in each quarter
• Employer’s total spending on healthcare
• Types of healthcare coverage the employer offered to employees

The Annual Report Form (ARF) must be completed online. OLSE provides robust assistance material online, including instructions for completing the ARF, form previews, and a video guide to completing the ARF (instructions available after April 1, 2025).

The deadline for filing the 2024 form is May 2, 2025.

The OLSE is hosting a live webinar on March 25 to review how to complete the ARF and best practices: OLSE Webinar Registration.

HCSO Primer

For those who might want a refresher!

Covered Employers

An employer need not be physically located in San Francisco to be a covered employer. HCSO applies to the following employers: 

• Employers required to obtain a valid San Francisco business registration certificate. 

• Employs at least one employee within the geographic boundaries of the City and County of San Francisco. This includes remote/teleworking employees who live in San Francisco. 

• For Private Employers: Private employers who employ 20+ employees where any single employee works at least 8 hours per week in San Francisco. 

• For Non-Profit Employers: Non-profit employers who employ 50+ employees where any single employee works at least 8 hours in San Francisco.    

Employer size counts are based on the average number of employees per week who perform work for compensation during an applicable quarter (not just those employees working in San Francisco). 
 

Covered Employees

A covered employee is any person who meets the following four criteria:

1. Works for a covered employer

2. Is entitled to be paid minimum wage

3. Has been employed by the employer for at least 90 days

4. Performs at least eight hours of work per week in San Francisco

The definition of employee under the ordinance includes all  employees, even if they are temporary, part-time, commissioned or contracted.

Work performed by an employee who lives in San Francisco and works from home is considered work performed within San Francisco.

Employees who travel through San Francisco while carrying out their job duties are not considered to have performed work in San Francisco; however, if an employee's job requires him or her to make stops in San Francisco (e.g., deliveries), the employee is considered to have performed work in San Francisco. For these employees, hours worked include travel within the geographic boundaries of San Francisco.
 

Employee Waivers

If an employee elects to waive the employer-provided coverage because they are covered under another employer, the employer may ask the employee to also sign the authorized HCSO voluntary waiver form.  

• If an employee voluntarily signs the waiver form, they waive the right to have their employer make Health Care Expenditures on their behalf.  

• If an employee with other coverage does not sign the voluntary waiver, the employer must still make the required health care expenditure on their behalf and may be liable for noncompliance penalties if expenditures are not made. 

The waiver form must be signed each year, cannot be retroactive, and is revocable at any time. 

In limited circumstances, employers do not need to obtain the HCSO voluntary waiver form from employees who waive coverage. If an employer provides a fully-insured medical plan that is free to the employee in at least one tier AND that coverage meets or exceeds the expenditure requirements (based on the medical premium only), then the HCSO voluntary waiver is not required, and expenditures do not need to be made. It is recommended that employees be informed that the employer-provided coverage meets or exceeds the HCSO expenditure rates, and thus, expenditures will not be made to the City Option if coverage is waived. The Annual Reporting Form must still be completed each year.
 

Expenditure Requirements for Prior Reporting Year

The ordinance requires covered employers to spend a minimum amount set by law on healthcare for each employee who works 8+ hours each week in San Francisco. The following are the required expenditure rates:
 

* Total hours for which a healthcare expenditure is required are capped at 172 per employee per month. 

There is an exemption for certain managerial, supervisory, and confidential employees who earn more than a stated threshold. For 2024, the threshold is $121,372 per year or $58.35 per hour. These employees are considered exempt and the HCSO expenditure requirements do not apply to them.
 

Current Year Expenditure Requirements

* Total hours for which a healthcare expenditure is required are capped at 172 per employee per month. 

There is an exemption for certain managerial, supervisory, and confidential employees who earn more than a stated threshold. For 2025, the threshold is $125,405 or $60.29 per hour. These employees are considered exempt and the HCSO expenditure requirements do not apply to them.    

Upcoming Deadline: The first 2025 quarterly expenditure must be made to the City Option within 30 days of the close of the calendar quarter. 

For comprehensive information about HCSO, please review the full HCSO Administrative Guidance. 

 

Resources

Administrative Guidance for SF HCSO

San Francisco Business Registration Certificate

HCSO Voluntary Waiver Form

2025 HCSO Poster

SF City Option Program

HCSO Annual Report Form Resource Guide

HCSO Self-Funded Premium Calculations