>> you need a motion should we make a full motion. >> it's appreciable so it's noted. >> read into the record. >> that all the full body agrees with that motion and it's officially documented this is a the official record of the commission. >> yes. >> so i move that we recommend to the sponsors that this legislation needs work in the areas that we have at least in the areas that we've identified here tonight and that. >> it needs to be continued. >> and it that we - recommend that the legislation be continued until those issues restraining order addressed. >> i second that motion.

>> all right. i'm do a roll call and taltdz. >> commissioner dooley. >> commissioner dwight commissioner ortiz-cartagena commissioner tour-sarkissian commissioner white commissioner riley and that motion passes 7 to zero. >> great thank you. >> thank you very much thank you for coming on such short notice now hear 2, 3, 4 ellen love. >> item 4 we've toddler i called this item into the record so we'll have ellen just - >> is this microphone on? >> it is great. >> okay good evening,

commissioners i'm ellen love with the office of standards and impoverishment thank you for inviting us to talk about the health care security ordinance i don't know if regina if you have copies of the power point presentation so you can pull it up that should be enough. >> so just briefly the administration i think you have the full that administration active guidance i tried to highlight some of the points that will be respect to you as a commission and the business community just a little bit of background on the health care security ordinance tests been in effect abstinence e since 2007 and there's two components the first i'll speak to say that it

establishes the city's access plan the san francisco plan and the city's medical reimbursement program and the second components of the law is the employers spending requirements to refresh your recollection it covers 20 employees worldwide and their covered by the security ordinance no, it covers nonprofits with 50 employees and requires that the employers make health care expenditures for all they're covered employees in san francisco so the requirement for 2015 i'll talk about firefighting first is that the employers spend one dollar cents per adhere that comes up to $284 a month foyer a for a moment person and are there's a requirement for one hundred

employees that they spend 2 there's plus it comes out to 4 hundred and 26 there's per month for a full-time employee that hassal has been in place the amazes u amounts adjust annually but they have been unchained on june 17th of this year, the board of supervisors passed an amendment to the law which you probably heard about it has 30 main components and they have now about in fiscal most of the central ones begins on january 1st, 2015, and it phaseout the revocableable health care expenditures theirs expenditures that the employer lots of for the employees on the books but explicit pay out to a

third party but they may return to them after a certain period of time and most common form is called hr a other components of the national black anthem amendment it charged depending s with adjusting the heath plan the new health care exchange you can ask page about that and the third component of the amendment what was that it allows employees to choose to opt out of some of the revocable health care expenditures before january but it basically if you had money in a health care reimbursement green before january 2014 you

may elaborately cho's which i see to opt out those are dollars that can revert to the employers can be over 20 years and 60 percent of all health care expenditures for each individual employee has to be irrevocable it is 80 percent for 2016 and one hundred percent for 2017 and beyond so employers can't make the revocable health care issues so that's what the board of supervisors did we took the time to adjust our guidance to get the language in harmony and issued new sections of the administration active guidance i'll go over we did that because we were

getting lots of questions from employers and clarifying the language also so, yeah we issued explanations of the new terms irrevocable expenditures and also wanted to provide i didn't want on the security ordinance with the affordable health care act so we issued a section on that and finally, we issued updated information on plans for 2014 sort of a yeerd year with the affordable health care act so it applies with a doubt a of a gap here so a little bit more on the information that we shared on revocable and irrevocable the irrevocable they don't revert to the employers and actually paid out to a third party or employee or someone and generally some

examples of those irrevocable are medical, dental and vision insurance and contributions to the city run access programs and savings accountants that are for the employees those are some of the examples of that revocable expenditures we sclafrd that as in the past those are generally the amounts is going into the hr a they have to be still in prior years have to be available for 24 months to access it during a reasonable period of time the employees have to be notified and the contribution is reasonably calculated to benefit the employee that's the language from the status we provided new information on what you have to tell your employees is you have

to tlachl what the benefit is use for and there hearsay been confusion on the benefits can be used for and so new language on our our office cease whether those accounts are reasonably calculated to benefit the employee and then okay second area we issued the administration guidance was how the health care security 0 are ordinance interactions with the affordable health care i won't go can debate but if you want more information ask me affordable health care act changes the rules around the health reimbursement accountants as january 1st, 2014, so the key things to note we can't make in

contributions to those accounts for core medical services so some employers have done - well, let me see sorry if an employee does have a contribution in one of the reimbursable accounts it makes them ineligible for the tax induces to get subsidized for california that's one of the issues the amendment intended to be addressed so if someone wants to get the new health care coverage they have this old balance remaining they can opt out of the old balance of the core medical services and access the induces so for tax credits on the exchange and we provide we issued a specific form if

their employees want to do that yeah. okay another area of the affordable health care that we provided information on is the accepted benefits and those are benefits that are not core medical services their dental, vision, and long term care and care for specific diseases like wrap around services that came in some cases be used inform satisfy the health care security ordinance and then the last thing note to the affordable health care act and the health care security ordinance is that under the affordable health care if i oh,

your employees insurance you've safety the requirement of that law for employees that need to ply with both louses laws you're only making an offer 0 of insurance company it safeties the federal but not the local requirement you actually have to spend the money to satisfy the local security ordinance not make an offer of insurance >> okay. >> (laughter). >> and so the final area we've issued is the compliance of 2014 it is a gap it's a little bit of that funny one the amendment requirements is not revocable it kicks in on january 1st but we've issued some combines last fall on those new types of health care accounts so there is combines that justifies for 2014

so and those have to do with accepted benefits of hr a it's an employer where they allocate money for a certainty period of time and collection the money accepted benefits of hr a that only combrurments for dental and vision and long term care basically, we issued the guidance on those types of accounts they're limited at the can't be used informing to the doctor or medical insurance premiums but only for narrow services we last year issued the guidance you, we will only consider those are that you reasonably calculated they're only a benefit to our employees

if i use them to 20 hours per week if you're putting thousands of dollars the full amount of the health care expenditures for dental and vision we don't know or think that as substantive benefit for the employee we will only consider it up to two hours per week we're continuing to enforce that and we'll be river employees that use those covets accounts to report to our office and in march and april of next year and also anyone that contributions in excess of that 80 hours will have to and if the employee didn't use that amount that was triblthd in excess of

two hours per week the employer will is to 52 true up they'll have to find a way to spend the funds that we're accrued in that the for more than two hours per week before january 30th of 2015. >> oh, yeah, the next slide is on employer outreach and support that you as a commission we've done our best to educate the small business community about those complex issues we can't speak all of the details about the affordable health care act but we do our by itself to answer the questions about local by the way, law and how the federal and local laws subcontract we've sent out e-mails when we issued the administrative guidance to more 6 thousand businesses and employers that are covered by

the law and we're answering e-mails and answer e-mails dial and answer phone calls and we'll be hosting a webinar in partnering with the city on those issues on december 16th and another one specifically on those sort of complicated accepted benefits hr a on january 6th or 2015. >> great. >> thank you commissioner white. >> hi thank you for being here honestly, i was listening to your presentation i'm still in the dark it's christmas eve to me as a small business owner it is probably confusing to other small businesses i think a question quick you talked about the small business owner employers that are using up to two hours and have to true up

with what where i said it is money to be spent where it is being spent and they have to find another way with the remaining fund if you have an employee that works 25 hours a week the employee explicit use any of the money about two hours a week so 5 extra hours accommodated throughout the year you can use it for health care for medical and dental insurance contributing to the option but contributing to the health care sales tax account or come up with a medical indemnity plan but that is something that

expenditures for health care services for your employees. >> so the option to pit it into a health care plan with that employee. >> yeah. a health savings account that is an option i've heard a number of employers that will be contributing to the city option i think i believe it is because we can do that with a specific dollar amount that can be a one-time payment and i've heard a complete opposite i don't think that any employers are planning on giving money to the city that's why i'm asking questions ems they can spend most of the small businesses it's going to be difficult not to have those funds back to the employer so just wanted to, if

what the other options. >> valid health care. >> uh-huh. >> commissioner tour-sarkissian. >> i have a quick question about the opting out if the employee opts out and the employer has to a different option to put it into a savings accounts. >> the opting out is for hr a triktsdz too january 1st, 2014, if an employee volunteering and knowingly and in writing to opt out of the funds then the employer is relieved of their health care options but need to make the expenditures for 2014. >> the phase out of 2014

receive cable funds we have 60 percent in eventually and 80 percent - 60 percent and 80 percent and one hundred percent from 18 to 17. >> uh-huh. >> there is a 24 month period for the employee to use those funds correct. >> correct. >> that's correct. >> does that assume that the employee is still employed with the same employer or. >> yes. i'm sorry the 24 month period if the employee remains employed with that employer if he or she separates that's a 90 days period. >> commissioner dooley. >> thank you for your presentation i read this about 5

times and we read this type of stuff everyday unlike the average small business owner i still find it incredibly hard to understand you know, i feel like we've really should have some kind of grace period because people are a going to be making a lot of mistakes here it's kind of beyond the cabinet of small businesses if the employee ochts out so they can be eligible for california what happens to the money accrued prior to the year does it vanish. >> it type of reverts to the employer and great.

>> 83 and then the thing about reasonably circulated to benefit the employees are we referring to the hourly amazes u amounts you've mentioned. >> there are a few criteria so the hourly amount i've mentioned a requirement that the plan be in place or you know for - >> the plan if urge you to use it for 2014 it had to be in place by 2014 that won't apply if you're creating it now and the third drae criteria it reimburse for the full ranges of health care benefits is can't just reimburse for only

orthodontists. >> i'm wondering about the employer that contributed to the accepted benefits. >> uh-huh. >> certainly i know in the restaurant industry a lot of employees are very young and typically maybe don't use their benefits then what happens to them? by that extradition date and we've not collected did day we've only seen this in the last year we don't know what their look like in prior years when the reimbursements wblth were reimbursed for the full range of medical and dental we saw the reimbursement of 20 to 25 percent and unused funds reverted to the employers with

those limited benefits in hr a's i can't speak i don't know but the funds revert to the employer after the 24 month period usually >> any other commissioner comments before we go into. less take public comment is there any public comment on this particular item? seeing none, public comment is closed and this is just a discussion item correct >> yeah. with tops such as this i agenda device it to provide the opportunity for the commission should they deem they want to take action but if there's no direct ask for you to take action. >> thank you ellen for your

presentation i actually learned something tonight on this so - although it is daunting and you are to figure out how to enforce did you have any sympathy so but i thank you for your comments tonight and your slide presentation helped me a lot because of the timelines and everything i hear about it from small businesses throughout the city so thank you, again yourself presentation. >> any other commissioner comments? okay. next item please. >> commissioner we are on item number 5 which is a presentation on the makers and movers for the

food and beverage disrespects this is a report and presentation on the report and we have diane in a who is the senior a planner from the planning department and tiffany will she be - no okay. take it away diane. >> thank you. i'm diane in a the senior planner with the planning department just a presentation while it loads up i'll talk about where this came from whether a year and a half ago i had xhfrgsz with the executive director of the hotel produce market that is in our audience about the dwindling space for the manufacturing and distribution in san francisco i'm sure you're aware of you're familiar with the problem we talked about what can we do about it and we had many

conversations about what businesses face and the challenges and hearing they're actually different between murray's and sdrshts and what we do to solve them we've accepted a sheri committee made up of local businesses and some of them are shown i worked closely with the office of economic workforce development tiffany garcia who is in our audience today and also spur who is here today and some of the businesses that are placing an actual rule in the recommendations so this is a slide showing some

of the businesses we've worked and spoken with and the idea yirnd beyond the geography businesses and how they can create the economy to scale when they're located near each other with common interests this slide shows a general dime of the overall suppliers to consumers that is nor the middleman the manufacturers and industry people some of the things you're familiar with i think the one that spanks to me is the employment and the diversity especially the fact that a lot of those businesses hire workers that don't have access to higher education and

those jobs provide a significant career lard and the wages are generally competitive to that level of education i can talk about in a minute so this slide gives us a bit of a general picture of where the industry stands so i'll point to the bottom left statistic about one in 4 production and distribution jobs in san francisco are food and beverage it is kite a significant sector in our economy that's one of the reasons we wanted to focus on it that this shows generally where they're related to the manufacturers include backers and other makers their spaced throughout the city but complicate in the east side of the city and the same for

sdrshlts that is a significant concentration around where is the produce market is associated in this area here so this shows regional trends in san francisco as i mentioned the food and beverage manufacturers and district courts are one and one fourth of all manufacturers jobs in san francisco that's 25 percent of the larger economy here so it's quite a few and significant contribution and that's one of the reasons we wanted to focus on that here's some regional trend san francisco is the purple line this is a tlien