i have a lot of respect for my friend rob black, but i will respectfully disagree with that. i do not think this is what he said. i think this is about notice. it is not just about the fact that notice is about how these accounts are being used -- as was noted before, the way the rules of the ira's work, it is up to the employer to set these restrictions, including the comments provided. we as a city do not have the ability to dictate the specifics of how the account worked. we were careful in how we drafted this piece of legislation. this was drafted in close consultation with the city

attorney's office, knowing the restaurant association had sued the city to try to stop the implementation of healthy san francisco. we have drafted this carefully to make sure we follow the clear guidelines the ninth circuit court has faced. while we do not have the right to dictate the specifics of these accounts, we do have the right to define an expenditure. we are simply saying that when we mean expenditure we mean the lemon's definition of that. expenditure -- the lame man fifth definition of that. the use of these -- the layman's definition of that. i would like to see expansion of these accounts, but i am against expansion on the back of the workers or other businesses,

their competitors, that are following the rules. i am also against expansion on the backs of consumers, who are making these statements when they go to a restaurant in san francisco. thank you. commissioner kasselman: i guess i just, to follow up on that, 7% of businesses are using the hra's. we have 4000 businesses resurveyed. -- we surveyed. who is using those? , many of those businesses would even know if they are not -- how many of those businesses would even know if they are not complying? if we are taking away so much money from businesses based on substantial statistical information, that is a hard thing to justify it. supervisor campos: the interesting thing about this

tete-a-tete is that it is coming directly from the businesses. we have 80% of the businesses who are meeting their obligations under help the san francisco not doing it using these accounts. we are talking about only 13% of the businesses using the services we are talking about. >> let me try tore- summarize -- let me try to summarize. the details i gave earlier --

president o'brien: let me stop you. the 90% is not a problem at all, right? and the 3% and 7% -- does the problem manifest through both of those, or just one of them? >> i believe supervisor campos's legislation has not tended to have an impact on the money allocated to healthy san francisco. those who meet the spending requirements through that would not be impacted. the only thing it would impact is the 7% of the money allocated to reimbursement plans. president o'brien: go ahead. thank you. >> the second way we have been trying to talk about this --

that would be the number of employers who the majority of their expenditures go to reimbursement -- 29% of employers use a reimbursement account in some way, shape, or form. one related point is to say that it is absolutely right that there are a number of variations and varieties of irs-recognized accounts. there are flexible spending accounts, health savings

accounts, health reimbursement accounts, and medical savings accounts. that provides a veneer of confusion here. but the percentage of these dollars are toward health and savings accounts. supervisor campos's legislation would not have an impact on that subset that goes to health and savings accounts. by law in definition, they have precisely the features that the legislation is imposing upon or requiring with respect to the health reimbursement accounts. in some respects, that is a way to look at defining the expenditures in a way of changing these accounts that are already in place. flexible spending is another variation. in our enforcement experience, there are no employers who use those to meet the requirement of

the ordinance. many of us have these accounts to our employers. while the irs permits an employer to contribute to them, 99% are employee contributions only. there are essentially a health care reimbursements and accounts. supervisor campos: i wanted to add something, through the chair. one of the points i think is really important is to put this in the context of employees who are under health insurance. . even if you look at the businesses that are anywhere

from 20 to 99 employees -- let's say the employee works full time the whole year. at the most, they can accumulate $2,850 in that account. you can imagine that will not even pay for one night at the hospital, let alone some procedures that have to be covered. that gives you some context of what that means for the employees. commissioner clyde: thank you for being here. michael tonight is not to penalize the high road employers. there are employers who use health reimbursement accounts who i believe use them properly, who do not have expirations. who provide benefits statements

regularly, who allow the broadest possible use of the account, and whose employees may elect to use their benefit to be part of healthy san francisco, to be part of a spouse's health plan, to meet a copayment, or to drop it down any way they choose. we have such a diverse employment base that we have people who work five hours a week. but in cases i know they get $1.37 per hour, and when the have a package of receipts for clarity and, -- claritin, aspirin, contact lens solution -- they submitted. my concern is our small employers and our high road

employers who are doing everything to comply with the spirit and letter of the law, which is to make money available to employees for their personal health care. to that, i have to say that 55% reimbursement rates for medical reimbursement accounts, i think, is a really good goal. if that is what the city can do with all of the city's outreach, education, language -- we have a very educated and active workforce. we have an engaged work force. we have organized labor that is very active. that is, i think, a great goal, a beginning. it would be great to have it at 80% or 90%, but maybe that is not even a goal. if you are one of these young 23 year olds who does not get

injured but in three years needs it for something, or has multiple accounts, i just see the benefits to the hra for the small employer. i would ask that the people who work for the city really look at making sure that we have access to an important tool that was created at the beginning of this program that is important to manage these expenditures on behalf of our employees. the other thing i wanted to communicate to you is that for many employers they meet and exceed the spending requirement for their total employees. i'd just want it to be remembered that if an employer is retaining use of the funds before they make an expenditure to their employees, then in many

cases they are using it for their employee health care. we are at age -- we are age- banded. my 23-year-olds do not cost very much for health insurance. the 62-year-old and the 55-year- old i have are three and four times the cost. we provide the same benefit. so i just want to let -- just want you to know that companies are using their health care dollars across the work force, and many times at a much greater rate than is the spending requirement. this is a policy. i just want you to be aware of this, when you are talking to our small companies and what they are facing. providing fair and flexible benefits that benefit our employees -- these are some

things i really want you to consider on behalf of the small businesses. supervisor campos: we have considered them. we are here to listen as much as we can to what you have to say. the vast majority of businesses, as you noted, are trying to do the right thing, not only under the letter but the spirit of the law. i think that one of the things that is frustrating about this process is there are many arguments that people make about the impact that healthy san francisco would have on the local economy. those arguments were made repeatedly to argue against healthy san francisco. but the reality is that the parade of horribles that people anticipated did not occur. it did not occur even though

there were many sacrifices that were made and continue to be made by businesses. people may want to the engage in that debate again, but that is not the point here. we have the program in place. this is about making sure that to the extent we are requiring employers to follow the rules, let us make sure the rules apply fully to everyone and there is a level playing field that protect the workers and protect other businesses who are doing what they were supposed to do. commissioner clyde: to that end, i agree with the intent absolutely. i just am very concerned about the implementation as this legislation is currently written, if it will disadvantage highroad employers who are complying and using these to comply. i would like more information about that. >> great.

thank you very much. president o'brien: i will later, but i want to give the other commissioners -- commissioner dooley: i wanted to ask tangerines some questions. could you give me the statistics on the complaints coming into your office of employers violating their notification, their excess ability to their employees? also, what is the enforcement procedure on that? can you walk me through that? >> i do not think we have actually had any complaints from employees who asked us -- you mean him. ok. >commissioner dooley: no, you. >> you are talking about the medical reimbursement account.

commissioner dooley: i just wanted to know how many complaints have been filed for violation. >> i think you want matthew. >> won distinction or confusion is which agency is responsible for what function. essentially it is the office of labor standards enforcement that enforces this requirement. one of the methods for meeting the requirement is to speak to tangerine at healthy san francisco. in the three years the law has been in place, we have initiated a little over 300 enforcement investigations. there are different ways to look at bat. we have received hundreds of inquiries and have worked with employees and employers informally to ensure that employers are meeting the requirements of the law and

employees are getting the benefits that are required. some complaints do not rise to the level of investigation. with respect to the enforcement law -- enforcement arm, between 304 hundred cases have been opened during this process. commissioner clyde: how long does it take to be reimbursed from a medical reimbursement account? >> it takes anywhere from three weeks to four weeks from submission. commissioner clyde: i have noticed that healthy san francisco has a wide ranging education campaign or advertising campaign. it is in neighborhood newspapers across san francisco. this is your goal to increase participation?

>> our campaign is designed for individuals who are uninsured who may or may not be participating as a result of their employer. you are correct that one can call 311, or go to our website. we have lots of fliers about the program. in terms of an employer -- commissioner clyde: this is just for the program. is the program working to increase participation? >> i think it is important to look at it from the perspective of how many uninsured adults there are in san francisco's. there is an estimated 64,000 uninsured adults in san francisco based on the california health service. there are about 64,500 uninsured adults currently in san francisco.

we currently have a take up rate of about 88%. we do not accept all uninsured individuals who want to enroll. commissioner clyde: do you know how many are employed outside of san francisco? >> no one can be enrolled in healthy san francisco and be a non-san francisco resident. commissioner clyde: employed outside of san francisco. i thought all san francisco residents who do not have insurance -- if they are employed in alameda county, san mateo county -- as residents, they are eligible for the program. is that correct? how many people are employed by employers outside of the city and county of san francisco? >> we do not maintain that information. employment status is not relevant. we do not care about your

employment status or immigration status. we do not ask that information. >> for me, as a resident of san francisco and a san francisco taxpayer -- if one of the goals of this program is to protect the san francisco taxpayer, i would like to know how many employers are being defective subsidized by our taxpayer dollars. -- being de facto subsidized by our taxpayer dollars. when we look at shifting this $52 million relatively quickly, and people starting to shift their game plan around, it would not be good to continue the exodus of opportunity outside of our borders while our residents continue to be -- continue to live here, but will be employed outside our city and will

continue to receive health care here. i understand you do not ask it. it is a status question. but i think in fairness to the business community it is an apropos question. president o'brien: any further questions from commissioners? i would like to ask a couple of questions myself. mr. goldberg, if i could ask you a couple of questions, and supervisor campos. maybe the question might be more directed to you. it seems to me from what i have heard tonight, which i must confess is purely educational -- i have tried to read some of it in education -- in preparation, but am trying to get most of my learning from testimony. is it fair to summarize our big problems are house some questionable employers are behaving in terms of

implementing this program, what that offer, the spirit of the law, so to speak, and the other being that some people, some employers, are not giving this money back to the poor are back to the employee? would it be fair to summarize the problems we are trying to tackle with this legislation as the way that some employers are implementing it and the fact that sometimes this money goes back to the employer? would it be fair to say the goal of the legislation is to make sure the money never goes back to the employer? >> yes. i think that despite a lot of complexity and nuances of the testimony -- you have hit it on the head that the intention is to make sure the money remains with and goes to the employee. it essentially redefines and clarifies the definition as one

that irrevocably remains with the employee, rather than reverting to the employer. i think it can next to another comment associated with it. -- i think it comes next to another comment associated with it. if you can keep open the idea that the money that is going to come back to you, that provides an incentive to proceed with some of the types of

perspectives that could be reimbursed. president o'brien: to play this out a little bit, an employer who puts money into the space of a year -- is it a goal of this legislation that they would receive some of the money that was set aside for that year? >> that money would remain available to the worker in that account, even after the employee has left the employment. the money remains available to that worker to reimburse future medical expenses,.

-- medical expenses. you are working for an employer who are spending money to put into this account by healthy san francisco. you may not have access that money, in part because you have been healthy. when and if you leave that, as you may or may not have moved on to another job. that money remains available in that account. that was designed to achieve parity with that and to reach the same practice, in effect. the money was put into health reimbursement accounts as permitted by the irs and the tax code. it would remain available to workers. president o'brien: this brings a whole new dimension to the proposal, the logistic associated with it, the accounting of that going to a

lifetime of someone's career. that scares me a little bit. i would also say that to me, i do not know what the supervisor's intentions were, but i think that he came to the realization one day that is -- that it is a tragedy that somebody can be medically infected with something, really need help, and cannot get it because they do not have insurance. i see that as a noble problem, a noble cause to tackle the problem like that. i think it is an ongoing risk control mechanism that we are talking about. i think it is a good idea for the purposes of managing risk that there is some sort of periodic reassessment when you get through the year without it,

like a car insurance policy. it is not the same league, but if you have been lucky and did not have a problem, having the employer take responsibility of resources to manage that risk for that year, the problem we have really identified is let us not have some of san francisco uninsured. i think we can do it in a way that is not going to be so devastating. that is probably not fair. but it is going to be onerous. i am sure we are going to hear testimony. but those are thoughts i wanted to put out there. if you want to respond, supervisor, you can. >> i can give one technical response to how this is administered. healthy san francisco uses a large third-party broker to administer and handle these

accounts we have been talking about. it is exactly the kind of company and broker that manages health reimbursement arrangements. it appears as though there would be third party agents like the one san francisco uses who would administer these accounts in a way that is consistent with supervisor campos's legislation. it does not appear there would be any concerns about the ability to administer these accounts in this way. there are practical examples already. president o'brien: thank you. supervisor campos: great questions tonight. we certainly will be taking on your comments into consideration. the couple of points that i know are really important to trying to meet the intent of what then- supervisor amiano was trying to accomplish -- we hear from a lot

of workers that this loophole is referred to as the "don't get sick in january" loophole. if you get sick in january, the money accumulated is going to be -- you start from scratch. that is one of the unintended consequences of what we have. the second thing, which is for purposes of the legislative process, is to really clarify what was said earlier, which is this notion that when the law said the employer is supposed to make reasonable health expenditures that somehow making those expenditures would not mean actually spending the money, but simply creating an account where the money sets. that was not the intent of healthy san francisco. supervisor amiano w