so, i sent the application for reimbursement, a friend of mine helped me out and after a month when i didn't hear anything, i sent another application. and so i called into the company that was administering the funds and they told me that it wasn't clear from the paycheck how much money they were taking out of my paycheck in order to cover the medical expenses.

and so they kept asking me to send my paycheck stubs in, i sent stubs in, it clearly showed how much health care money i set aside but they still have not to this day made any reimbursements. and when i stopped working there, a friend of mine told me that after three months of stopping to work there, they're going to take back all the money that had been reserved for my health needs. >> thank you very much, mr.

vasquez. >> thank you very much, have a great afternoon. >> if i could just make one point to olse staff, i'm hoping there might be some follow-up with the cheesecake factory. >> before we get to ms. hail, let me call additional speakers, jim lazarus, kim jacobs and gordon mar, ms. hail? >> i'm vera hail and today i'm here just as a restaurant goer and i'm one that objects to the as -- surcharge and glad to see that was part of the recommendations, when i buy something at macy's or amazon, i do not have to pay for their employee's health care. whenever i eat out, i only eat at mid priced or lower

restaurants, so not everywhere do i eat is covered by this, but i've noticed that the places that i do are adamant about it and i talked to the server to find out what the problems are and most of them do not have it and don't know when it starts when i talked to them. there was only one place that offered to remove my surcharge and when i complained about it and wherever i go, if it's on the bill, i complain, but nowhere else except this one place has offered to remove the fee. i think that all of these restaurants are doing okay by the number of people i see on them, they're not on the verge of closing, and i don't think

that health reimbursement plan is a good idea. as a former director of an agency that had a clinic, it would not be enough health care to keep people really going and it sounds like it's madder to get it paid fortoo. i would like to subjecting that you have some health advice on these issues. >> thank you, ms. hail, next speaker e , his paris. >> hi, my name is brenda paris, i work at a medical clinic in san francisco clinic, i've complained about this from the very bin -- beginning that the money is not getting into the health system and working on its way down to people who are providing the health. we're in the process now of doing a medical home program

and so it's a lot of pressure being put on the workers and see what the patients go through every single day and there are people that should be covered that are working at these places that come to us not covered that can't get their medicine, that we have to do all kind of work around to make sure they get the health care they need, so it's my belief that the money for healthy san francisco needs to go straight into healthy san francisco, we need to cut out the middle people, it's just another mechanism to black people from getting health care from what i see from the patient care end. >> thank you very much, next speaker, mr. lazarus? >> good afternoon, supervisors, chamber of commerce, we appreciate the opportunity last year and way back in 2006 in working with the city in developing healthy san francisco program, the health care security ordinance, it's a

complicated issue, much that was broukt up from the grand ju, we appreciate their work and we cooperate yearly, thing that is are covered by federal law, it's not an easy solution, but the vast majority of san francisco businesses provide insurance and the vast, vast majority of son fra*ns businesses are spending required amounts of money, every survey and report by your agency show that and supervisor campos has acknowledge hated but there is an issue with some categories of business, but we're working together, small business associations, the chamber on educating employers and employees on the rights and obligations under this law. we've worked with television ads on cable television, the city, websites, direct communication with members,

thousands of employers have been communicated with by our organizations and by the city to understand how to make this work for the employee and how to make it work financially for the employer because you have to remember in the last half a dozen years, the cost of small business to employ entry level workers in san francisco has gone up 50%. that is health mandate, sick leave, minimum wage, things we believe in, things that as san franciscans we support but things that have a tremendous burden on low margin businesses so we look forward to working with you over the next year as additional information comes in from the implementation of last year's amendment. thank you. >> thank you, next speaker. >> hi, as you can tell, i'm not jim, my name is rosa, i'm hear

on behalf of health access, california, advocating for affordable health care for all californians, we commend supervisor cohen and supervisor chu's efforts to develop an alternative compromise legislation that was signed last year, and the mayor, however the fact that employers could reclaim health care dollars after two years did not end the incentive in our opinion of course to continue to place unreasonable expectations on these accounts, it's also our opinion that the legislation last year that didn't go into effect would have effectively closed the loophole. the office of fair labor standards report demonstrates that a large number of employers continue to place

significant restrictions on hra's such as restrictions for dependent coverage, dental and vision care, we believe employers will continue to place these and other prescribers unless -- restrictions unless there are other restrictions, it's not that these funds come from nowhere, these fund should be there for these workers when they need it as previously stated by the worker that was here today. we recognize san francisco as a leader in many ways in health care reform and we encourage you all to continue your efforts, but most importantly to close this loophole once and for all, thank you. >> thank you very much. >> mr. palson? >> supervisors, thank you, tim palson, i'm the executive director of the son fra*ns labor counsel, we represent thousands of people in town who do have health care due to the

fact that they're members of unions and they were able to bargain for that, we did not close the loophole the last time around, as part of the huge coalition of people that work diligently over a year to get what is by far the most progressive piece of health care legislation in san francisco in 2005 to see that there is still incentives and we can see it because the horse is already out of the barn even with the grand jury data they happen to use and i'm not optimistic the date -- data is going to change in any significant way, we did not close the loophole, people still get their money back after two years and that is an incentive for people not to buy health care, so i want to f*u for having this hearing, i want to thank the grand jury in looking into this and for being so intuitive, so i hope we get

to the point where we close the loophole really in a way that people do get their health care as was the intention of the law. thank you. >> next speaker. >> hi, kim jacobs, i also want to thank all of you today for having this hearing and for the grand jury, the report they did which i think was essentially correct, an important contribution. it's helpful to start in remembering why have a health care spending ordinance, and to understand, it was really an important element of san francisco trying to move towards universal health care because we know the city provides care to large numbers of working families, that employers, when employers don't provide coverage, that means there's a greater cost to the city and also by having the spending requirement, it levels

the playing field between firms who don't and do offer health care, as we heard, the use of health reimbursement accounts as a way to meet the law has been growing, it's been discussed that san francisco's mra's pay outs, the national average where there are restrictions on accounts are 35%, it's hard to do a perfect comparison, not all the populations are the same but it is indicative that the things causing the low pay outs are the xin nation of restrictions and not a lot information, the law amendment that was done did address notification, really it remains to be seen if that's enough, it's important to note that federal law requires employee notification and

requires cober notices. we strongly encourage the city to continue monitoring this and appreciate supervisor chu's earlier comments that if we see that this is continuing, to really take action because that's what's needed. thank you. >> thank you, and before mr. mar, any additional public comment, please line up. >> great, thanks, supervisors, and i really want to thank supervisors campos and cohen on all the work you did on this important issue and the departmental staff, and i want to commend the volunteer civil grand jury on nair work on this and i think the valid concerns about the data aside, i really feel like the grand jury's work reflects a broad, a strong feeling of broad segment of the community that this issue is not yet resolved and that workers continue to be denied

their full health care benefit, consumers continue to be cheated and small businesses who are playing by the rules continue to be understood cut by low road competitors, so as you supervisors know, jobs of justice has been working with a coalition of small business community and labor groups on our campaign of small jobs and healthy communities where we're trying to support small businesses in the retail and grocery sector and supervisor mar just introduced our first piece of legislation this week that incentive small businesses to provide healthier food options in underserved communities, allowing this loophole to continue is really incentive bad business options. it's the exact opposite of what we're trying to promote in our

good jobs and great health campaign, we look forward to working with you as we continue to make efforts to close the loophole. thank you. >> thank you very much, is there any additional public comment, seeing none, public comment is closed. so, colleagues, supervisor compos? >> mr. chair, if i may, i'm going to have to leave because i have to chair the joint board of education, board of supervisors committee that will start shortly, so if i may, i simply wanted to make some last remarks. i do want to thank everyone who came out, i want to especially thank the work of all of the city agencies, the work that olse is doing and there's a lot of coordination that goes into this, but for me, what was especially touching was hearing from the worker who talked about his story and something

that actually just happened so it's not like this is something that goes back two, three years, this is something that is very recent. i know that there are differences of opinion on this committee and on the board but i do think and with the mayor as well, i do hope we can get to a resolution. there are two issues that i think remain unresolved, i think on the issue of the surcharges, i know there has been an effort to address that issue, i still don't think the effort goes far enough and while i appreciate that this board and the mayor have given more resources to olse, i think that we flexed -- need to consider being more proactive about that work, olse is able to do that if they have the resources to do that, i don't think it's simply enough for us to react until there are complaints that are issued, protecting health care is

something that requires more proactivity, there should be more proactive auditing that takes place, on the issue of the expenditure limitations that are placed, at the end of the day, as much as i do think that some progress was made on the surcharge, i think that on the expenditures, the amendment doesn't really do anything to address the fak that going forward, businesses will be able to place those restrictions and i think that that's something that is going to have to be addressed and i believe the only way to address it is to require that expenditure mean expenditure. the last thing that i would say is i think it's unfortunate that even though san francisco for a long time was leading the way on health care and i think for a long time we could say we were the leader in terms of

providing universal health care in this country, i think san francisco has moved backward and the ironic think about hra's is we may have a possibility that as some people are defending the use of hra's here in san francisco, at the federal level because of the health care act, the hra's will no longer be allowed at the federal level, so you have a situation where the country is headed in the direction that san francisco was going not too long ago, in san francisco, it's going in the complete opposite direction. i think we're better than that and i hope we can find a solution here in city hall but i do think that if at the end of the day that solution is not found, i think that notwithstanding what happens in city hall, the people in the city of san francisco are fair and just and ultimately might require the voters step in and do what city hall is not aib do. i hope we don't have to get to that point but in the past, that has worked and has been

needed so i think that all oxen are on the table today, but i look forward to continuing this discussion. thank you. >> thank you, supervisor compos, okay, so right now, having heard the various reports and taking public comment, the committee need to prepare responses to the findings and recommendations ver bait tum language which we will forward to the board for recommendation by way of resolution, so i guess we should go finding by finding, president chu? >> and i want to make a couple of introductory comments, i may also say, i am supposed to be at exactly the same schools and committee meeting, i think supervisor lag gi, we're all supposed to be there, unfortunately because the committee's coincide, i'll be here until the meeting ends,

san francisco, we led the way when it came to moving forward with universal health insurance and i think the policies we have in place really demonstrate and are providing a leadership role for what it is we're doing, with we made a decision to require employers to put money into these accounts from january 1, 2012 to january 1, 2014, that was done with the idea that president obama's health care legislation would go into effect and we would soon be in a regime where i think these issues will truly be mute, so i want to make that point because there is a little bit of confusion about what it is we were doing but from my perspective, what we did put in place provide a lot of requirements for businesses to fulfill in order to make sure that employees are receiving health insurance. that being said to chairman wiener's points, i do have a

number of obvious changes to the findings that were recommended to us by the civil grand jury and i must preface this by saying, i respect what the grand jury said, really in part because i don't think the findings reflect the amendments we put into place at the end of last year, if i could start going through the findings one at a time, for finding number 1, about whether the jury could not identify any governmental investigation or any government investigation that reports the number of businesses and surcharges to pay for scho, i suggest the committee state we disagree partially for the following reason, the board of supervisors passed legislation amending the health care security ordinance in november, 2011 that [inaudible] on employer compliance with the

hdso, as a result, this information was required in the 2011 annual reporting forms distributed to employers in march, 2012, as of january, 2012, it required that all employers to [inaudible] if they add a surcharge for the purpose of covering in whole or in part the cost of expenditure mandate, this is reported annually in the olse, it does not address mandated paid sick days. >> i would agree to that. maybe we could do this by way of one motion in the end instead of motion by motion. >> with regards to finding 2, i also would respectfully disagree, again, reiterating that the board of supervisors pass legislation amending the

cho, collecting money from employers to cover health care made on behalf of employees, that legislature required all covered employers to inform olse to add a surcharge where the purpose of covering the cost of the expenditure mandate, the city requires the reporting of all health care employees, this is reported annually in the olse ordinance, further in october, 2011, the district attorney's office opened a preliminary review and to this issue. with regards to finding number 3 and for members of the public, we have to read all this in the record for our purposes here which is why i am going through this, also respectfully disagree, the board of supervisors refers to the response by the city and county of san francisco treasure and tax collector and to the response board of equalization, with regards to finding number 4, we disagree,

there's process in place at olse to collect, analyze and report on employer's surcharge data in compliance with provisions, it increased olse's budget. with regards to fundbacker finding number 5, again, respectfully disagreeing, olse's 2011 annual form, employees were asked to report to surcharge collections and expenditures for employee health benefits in 2011, effective 2012 in january as per an amendment to the schonf the amount of surcharges collected for employee health care exceeds the amount spent on employee health care tha,

employer must irrevocably pay and designate that amount equal to that amount. finding number 6, partially disagree, the board of supervisors defers to the response of olse, and it is as follows, the ordinance regulates surcharges imposed on customers to cover in whole or in part the cost of the health care, it is difficult in some circumstances which of any portion of a surcharge is imposed for customers for this specific purpose, however, the olse will ensure that employers understand this provision of the ordinance for and are in compliance of it and for members of the public, we have many, many findings, departments gave us their recommendation and is we are incorporating the recommendations we see make sense. with regards to finding number 7, i would agree with that statement and incorporate the city attorney's spops to finding number 7 which states

that a business commits consumer fraud if it assesses a surcharge for a stated purpose with the knowledge that it will use the money for a different purpose. with regards to responses to recommendations for recommendations 1, 2 and 3, i would recommend that we not implement those recommendations, for the first recommendation, i think we state that recent amends to the hcso adequately address the issue of consumer fraud, the board of supervisors support businesses identify how to cover their cost within the individual business models as long as it is done within compliance of the health care ordinance. such investigations are within the purview of the state..[reading].. tax collector. >> excuse me, president chu, are you specifying this recommendation will not be implemented? >> correct, for recommendations 1, 2 and 3.

with recommendation 3, the finding should be that the board of supervisors defers to the district attorney's ongoing investigation, the board does have the power to require to pursue recommendations so this recommendation cannot be implemented by the board. going to the findings related to employer's health reimbursement accounts, finding number 8, disagree, and for this, the board of supervisors refers to the olse's response, the analysis of the 2010 annual reporting forms provides that employers allocated to health care reimbursement perhaps, flexible spending accounts, savings accounts, medical savings accounts, the 12 thousand dollars reports the amount..[reading].. from all of those types of accounts, the annual reporting form does not

ask the employer's what happened, these allocation and is reimbursements were reported by 2019ed and 16 employers who submitted the annual reporting form to the olse, with regards to finding number 9, disagree, the city and county does not know employees and employers using those, similarly there is no data between the differing reimbursement rates, the board of supervisors made amendments and believes they will help increase reimbursement rates and other reimbursement programs. finding number 10, partially disagree, the board of supervisors defers to olse's response, finding number 1 1, partially disagree, time limits

are standardized. finding number 12, partially disagree, the board of supervisors refers to the response of the city attorney, the city attorney agrees that hra's may not be an allowable option o under the affordable care act, this question will be answered definitively by forthcoming regulations. finding number 13, disagree partially. under the previous law, this could be have been a case under the recent amendment ts, this issue was addressed in a var iet of ways including posting and quarterly notice requirements so employees are aware of their benefits and how to use them and by requiring all unused monies to remain with the employee for 24 months, the law now requires that any benefit plan must be structured adds to be reasonably calculated to benefit the