for their indulgence on this issue, which has been an issue that has been before us for quite some time. i also like to take the opportunity to thank supervisors cohen -- supervisor cohen and her staff for the work they have done on this issue for what i know is the intent behind the amendment. let me say that while i appreciate the intent and appreciate the effort, i do respectfully disagree that this is the right direction for us to go down. contrary to what president chiu indicated, i do not think it is something that we as a board necessarily should be proud of in terms of what this amendment does. when i began the effort to close this loophole in the ordinance, i designed by ordinance so they presented little to no legal risk to make sure that not only did we not have a significant

legal risk but that we actually, through the amendment, tried to do what we were trying to do, which is close the loophole. you look at the legal history of the ordinance and the challenges that were filed by the golden gate restaurant association, i think that in many respects, one can say that we got lucky in being successful in that endeavor. if you read the ninth circuit opinion, it is clear that as we make any kind of change that we have to be very cautious to make sure that we are in fact not micromanaging the administration. the amendment i introduced is an amendment that in a very careful way tried to avoid that micromanagement. unfortunately, what supervisor cohen and president chiu have addressed today in the amendment

that is before you is an amendment that legally creates problems. it is an amendment that legally would be susceptible to a challenge as the ninth circuit, and depending on what happens in terms of the panel we received at the ninth circuit and depending on what happens beyond the ninth circuit, not only with the amendment itself be in jeopardy, but the entire ordinance could be in jeopardy. we have to understand the legal context in which this is happening. the u.s. supreme court just granted cert on the federal health-care legislation that president obama and the congress passed. we are now, therefore, facing the very real possibility that a very conservative supreme court and a very conservative court system will take a very different approach to the issues that are underlying this legislation and the issues which the ninth circuit decided in our

favor, so we have to tread lightly, but the problem that i have is not only that there is legal risk that is created by this amendment but that ultimately, the legal risks do not actually address the underlying problem, that in fact, a loophole remains if this amendment is passed. under supervisor cohen's legislation, there will continue to be a loophole because employers will continue to have an incentive to limit the type of services eligible for reimbursement by health reimbursement accounts. we will therefore continue to see employers preventing employees from using their hra's for essential services like vision and dental care, and there will be nothing that we, the city, can do under this amendment to prevent that from happening. i have no doubt that we will continue to see the trend where many of these employers will rely even more on these hra's.

we already see that trend happening right now. the percentage of businesses relying exclusively primarily on hra accounts just a year ago was 9%. that percentage a year later was 13%. we anticipate that because of this amendment that essentially codifies the use of hra's as something sanctioned by the city, that percentage will increase. that, unfortunately, is going to continue to hurt workers in the city and county of san francisco. not only that, but by failing to close the loophole, we will continue to leave taxpayers to bear the burden of what happens to these workers. the fact is that these workers that are denied access to health care have to go somewhere when they or their children, someone in their family, get sick. we know that what often happens is they go to sf general

hospital and we as taxpayers and that paying the bill. let me also say that while i appreciate the effort, the question that remains for us going forward is -- what is the meaningful and effective way of closing this loophole queried -- loophole? we have been working on this for quite some time. the amendment was introduced in may this year. we have a broad coalition that you will hear from today. what is unfortunate about the process that has been followed in terms of the introduction of this amendment is that there has not really been meaningful opportunity for that coalition to sit down with the author of the amendment to really talk about the consequences of this amendment and to really understand what it will do to workers here in san francisco. while i understand the intent and i get appreciate the fact that there is an interest in making something happen and doing something about this problem, we have to make sure

that whatever we do does not actually create the problem -- does not even make the problem worse, which is, i think, unfortunately what is happening today. someone said to me that the net effect of this amendment is that it makes healthy less -- healthy san francisco less healthy. in the interest of whether we should allow employers to limit the amount accumulated by these workers, on that issue, the president of the united states and u.s. congress have spoken. under federal law, the federal government has taken the very clear position that there should be no such limitations placed on those workers. on that issue, the mayor, who introduced his amendment, is taking a position that is, quite frankly, to the right of the u.s. congress and the right of the u.s. president. president chiu's amendment is

actually even farther right because it provides for less time that an employee can accumulate, so while i appreciate the fact that what supervisor cohen has done improve that legislation, it is simply not enough, which is why the coalition that brought this matter before this board respectfully today stands against this amendment. thank you. supervisor chiu: thank you. unless there are any other introductory comments, what we open this up to public comment? actually, before we do that, i would like to give an opportunity for city staff from our office of small businesses, if you would like, to say a few words about your office's work on this. >> thank you. earlier this year, as supervisor campos noted, we identified a flaw in the ordinance that provides a loophole for dishonest businesses. there have been varying opinions on recommendations and solutions

on how to best remedy this loophole. as noted, we have had many meetings with stakeholders on all sides. the commission wants me to take an opportunity to thank supervisors campos and the labor counsel for raising the issue, for caring deeply about employees and their ability to access health care. would you, many small businesses are equally as frustrated with many small businesses taking advantage of this loophole. the small business commission also wants to take the opportunity to thank the mayor, supervisor chiu, and supervisor cohen for their dedication in finding a solution that understands the complex nature of how businesses utilize these accounts to meet the mandate of the health care security ordinance. the increased access to health care and minimize job loss. on october 3, the small business commission recommended approval to the board of supervisors with supervisor david chiu's

legislation as is. today, you received the recommendation from last night's meeting that we recommend the amendments that supervisor cohen has put before you. we thank supervisor cohen for accepting two of our non- substantive amendments. before you is a well-thought- out solution that publishes the goals of increasing access to health care while minimizing job loss. the office of small business has consulted with many small businesses, and the small business community recognizes that it is a stakeholder in providing meaningful health access along with noticing, reporting, and finds that the two-year accrual basis rollover will accomplish the goal in improving health access, and the commission strongly in forces the amendment. the small business community also recognizes that the january

1 will poll is a critical issue and must be addressed as soon as possible. the commission thanks supervisor cohen and david chiu for incorporating the recommendation to insure this issue is resolved beginning with calendar year 2012. in conjunction with the broader community, the sbc finds ending this condition promptly is essential to providing meaningful health care access to employees. the remaining amendments the small business commission support. i and the commission are also committed in working with office of labor standards enforcement as we implement this legislation and monitor businesses so they are utilizing the hra's and work with businesses to increase access to health care. in closing, the small business commission urges you to support -- to support and vote in

support of the legislation today to ensure that workers are covered and able to access and utilize their health reimbursement accounts. thank you. supervisor chiu: thank you. why don't we start our public comment on this topic? if members of the public wish to speak on this, please line up on the right side of the chamber facing us. why don't we hear from our first speaker, please? >> thank you, president chiu and board of supervisors. i am a member of doctors for america, a physician activism group. as independent organizations committed to analyze the impact of policies and protecting and improving the public's health, the equal health network and doctors for america strongly support healthy san francisco. the program is important for

providing coordinated health care for women who often work in service sector jobs that typically do not offer health insurance including restaurants, health care, child care, and non-profits. a small number of employers deliberately misappropriate funds contributed by customers that specifically cover san franciscans for the health care they need, averting consumer payments designated for health the san francisco back into the pockets of business owners is dishonest and a violation of our trust. at a time when there is national agreement that the lack of health care coverage threatens uninsured employees, the practice also shows disregard for the workers who are denied care as a result. employers do not deny that they are subverting the intent of the law and the good will of their clients by paying into health reimbursement accounts, which they used to offer severely limited health insurance products to their employees. they claim that seizing such a misappropriation would be harmful to the economy. the majority of the city's

employers to recognize the economic as well as advantages of using the money to help the economic security of low-income san franciscans. we urge the board of supervisors to reject the amendment engage seriously in an initiative to make sure the funds are used as intended, to provide health-care coverage to san francisco workers. thank you. supervisor chiu: thank you. next speaker. >> hello, board. i wanted to step forward as an employer who is charging a surcharge, as many of the restaurants in the city are, and does put all of that surcharge toward my employee benefits. i am shocked and offended that so many restaurants that i go to have a surcharge at the bottom of their menu, and if you ask your server -- just try doing this -- ask your server,

"do you have health insurance?" most will say that they do not or that it is only four full- time people. i asked if they have reimbursement accounts, and they will say they are not sure or have not been told how to use them. it is fraudulent, and my business has been completely comfortable financially with what our $1 per person charge. we have been able to provide full health insurance through kaiser, completely paid by the business for everyone that works even one day a week. we provide full dental coverage. a 401k with 4% match and two weeks sicklied and two weeks vacation. with the other businesses are doing with that money is beyond me unless it is just going in their pockets. i just do not see that two years of time to spend money that you are not aware you have is going to make any difference. my business is largely staffed by people where english is not

their first language or where they feel intimidated to ask for what they are owed. i do not think expanding this one more year so that they can accumulate more that is going to be taken from them is in any way to their benefit. i ask you to turn down the legislation and consider a way that would really close this loophole and give businesses like mine that are doing the right thing if their footing in this city. thank you. supervisor chiu: thank you. next speaker please. >> i would really like to commend the previous speaker. i am a worker. we need more business owners like her. the problem, as the situation stands right now and as the proposed amendments would make it, is that she is placed at a competitive disadvantage for doing this. these amendments do not fix the loophole, and they do not help me as a worker. if anything, the possibility of a legal challenge places the amendments as having the

potential to make the situation worse for me as a worker. it does not matter whether it, january 1, a rolling year, as long as employers have an incentive to take the money back, they will. right now, they are taking 80% back. i am working for my third catering company so far this year. the employees do not know about this benefit. i asked my boss. i asked my boss' boss pierre they told me it does not exist. i ended up getting health care reimbursement by marching into the vice-president of hr's office and demanding it. since then, i filed a complaint with the city. the company filed a complaint with a lawyer. they are spending a lot of money on a lawyer to say they did everything right when they did not do everything right. because they have an incentive to keep the money, it can be a lot of money, and it is not fair to business owners that give their employees health care to

be placed at a disadvantage for that. as long as there's money on the table, employers will want to take it back. i am the only native english speaker at the restaurant, the only one who is college educated, and the only one who would just march up and say, " hey, give me my money." these amendments do not fix the problem for employees who do not have a voice. the money needs to be there to stay to get employers an incentive to give health insurance or to tell them about the reimbursement accounts. without that, there will always be an incentive for employers to take money back. this does not fix it. the money needs to stay for the employees. thank you. supervisor chiu: thank you. next speaker. >> i work in the intensive care units. every winter, we have people who

are young, have small children and were brought into our intensive care unit because of septic shock caused by systematic threat of infection, which is often developed by a simple conditions such as pneumonia, lung infection, or flute -- flu. if the condition is severe, these patients often face death. life-threatening illness can be avoided if those patients could visit a clinic to get antibiotics or even if they could, in the er before completely collapsing appeared however, most of those patients hesitate to come in for a very long time because they could not afford the $3,000 for the visit. instead of getting medical care, they just hope for a full recovery, which does not happen until after weeks of hospital stay, or sometimes it never happens. it was heartbreaking to see young wives or children at the bedside in fear of losing their

husband or father. it is always painful to see these because i know this could have been presented by a single er or clinic visit. their lives could have been saved if they had access to affordable health care, which i believe supervisor campos' legislation will provide. as a bedside nurse, this will affect so many lives in san francisco. i hope we will have universal health care in the near future, but illness or injury happens every day. it can happen to anyone. we should save one life at a time. thank you. supervisor chiu: thank you. next speaker. >> afternoon, board of supervisors, president chiu. ♪ they work hard for the health care so hard for it, city so i hope you treat us right

we work hard for the money and health care so hard for it, city and i hope you treat 'em right and some have worked for years and they have lots of health care security fears they work hard for the health care so hard for it, city they work hard for the health care so will you please treat them right and when will we see good health care once again ♪ thanks. supervisor chiu: next speaker. >> i will read mine.

jim lazarus, san francisco chamber of commerce. we thank supervisors chiu and cohen for presenting the amendments today. we have attempted to reach out to the labor unions and supervisors since last may to work on alternative to the original proposed language, which would have resulted in a $15 million tax, mostly on small businesses in san francisco, putting many of them either out of business or having to reduce their payrolls to meet a cash mandate that was required by the original legislation. we cannot say that this version today is perfect for every employer, either, because if you are an employer with narrow margins, having to put in effect up to three years of money away per employee is going to be a hardship for many employers and have an impact on business, but we understand the need to put in better notice. we understand the need to

clarify the provisions and make them enforceable. we understand the need to provide a rollover january 1 of every year. we understand the need to create more certainty that benefits will be available that employers can afford, and that is where this debate is falling on deaf ears. the vast majority of employers do what they can do. but either insurance is not available because they're part- timers and are not covered, or they do not have the cash for an actual cash outlay. the accrual system most businesses can live with, and we look forward to working with the board and city departments to implement the amendments that are proposed today. we thank the supervisors and urge their support for the amendment. supervisor chiu: thank you. next speaker. >> small business owner.

i come to support supervisor chiu's legislation with supervisor cohen's amendment. quite frankly, small business sees 24 months as a long time, but in the interest of trying to find a compromise, the small business community has come together and supported that. we abhor those that are making surcharges and not giving back to their employees. we are as offended as everyone is by those, but we do think this addresses those issues. it is a balance. it provides notification. it provides a 24-month rollover, and we think back -- that this is something that will be good for the employees' health and keep money in the economy so we can create jobs. thank you. supervisor chiu: thank you.

next speaker. >> julie fisher. i live and work in san francisco. i have worked at the same place the last 26 years. i had the good fortune to half affordable health care, and i applaud the efforts that have gone on so far to make this available to more members, working people of the city. you're supposed to today's amendment. i support supervisor campos. i hope everyone will look closely and remember who will benefit here. employers, the few that have not been fair and equitable, should definitely be address, but i want to say more than anything that having health care allows me to do my job well, to be an active part of my community. this is some of the goals for you today. thank you. supervisor chiu: thank you. next speaker. >> i am one of the vice presidents of the labor council. i am also one of the founders and leaders of jobs with justice, which is a coalition of labor unions -- 10 labor

unions and 15 community organizations. the label -- labor council and jobs with justice feel that these amendments are worse for the workers than the previous loophole was. these amendments basically will hurt the workers, and that is our key element that we look at. how will it hurt the workers? it will begin to shift workers and employers back into these hra's, which are the cheapest form of health care under our health care security ordinance. so it will be natural for these 20% of these employers who are violating this health care security ordinance -- it is only a small amount of people who are doing this. for this small amount, they will continue to look for the cheapest way to go forward, and the cheapest way is these health care hra's, and these hra's will

lead to not any better health care for the workers who really need them. $4,000 or $5,000 a year is not enough to pay for any kind of very large medical bill. so this money needs to be rolled over. as the worker himself said, any time there is an incentive for the employer to give back the money, they will look for a way to get back the money -- any time there is an incentive for the employer to get back the money. we urge you to look again and work with the supervisors who are interested in closing this loophole. thank you. supervisor chiu: thank you. next speaker. >> i am speaking on behalf of lee's deli, several restaurants in san francisco. i would like to applaud the intent of cohen chiu's

legislation. there is a consumer fraud issue and a contribution issue. i do not think anyone disagrees that a restaurant is charging 4% for healthy sf that it should go to healthy sf or summer. i think you could pass that legislation with or without the contribution, so by all means, past the first period when dealing with a contribution issue, i agree with the intent of supervisor chiu and cohen's legislation. but i appreciate supervisor campos' position here in one word or two words that bothered me was irrevocably designated, which is a term in ira accounts. i feel like using that word is treading very close. the second part of my problem with this legislation is the alternative provision. if the meat and potatoes of the

legislation is ruled unconstitutional, then the alternative provision, which businesses are against -- that bill comes into effect. i feel it is sorted disingenuous for this legislation to say, "look, accept this, but if this is wrong, we will give you something worse." thank you. supervisor chiu: thank you. next speaker. >> good afternoon, board of supervisors. thank you for your time. i am a bridge fellow at the asian law caucus. i am on -- here on behalf of the caucus to urge the board to find a different and better solution to close the loophole in the health care security ordinance. we have a workers' rights clinic for low-income individuals, and we council our folks on a wide range of employment issues. we also provide representation through direct services on wage

and hour claims as well as unemployment benefit appeals. a vast majority of the san francisco workers to come to us our modeling will or what is known as lep, limited english proficiency. most work in the restaurants, hotel, retail, construction, transportation industries, and they perform back-breaking labor every day. however, almost all of our workers lack health care, lack health insurance for themselves or for their families. they are constantly struggling just to get the wages that they have earned. a lot of times, what ends up happening is that the idea of health care kind of falls to the wayside. they can only fight so much. for these same workers, the promise of the health care ordinance has been a critical method of securing some measure of health in -- insurance for these individuals and their