Employer Spending Requirement (ESR)

The Employer Spending Requirement of the Health Care Security Ordinance requires that a Covered Employer make minimum health care expenditures for each Covered Employee. The minimum health care expenditure amount is determined quarterly by multiplying the total number of hours paid to the Employee by the applicable health care expenditure rate. “Hours paid” include both hours worked by the Employee plus any paid time off, including vacation and sick days, used by the Employee. Health care expenditures must be made at least quarterly, no later than 30 days, after the end of the preceding quarter.

2017 Expenditure Rate2018 Expenditure Rate
All Employers with 100+ Employees $2.64 per hour paid $2.83 per hour paid
For-profit Businesses with 20 - 99 employees
Non-profit Businesses with 50 - 99 Employees
$1.76 per hour paid $1.89 per hour paid
For-profit Businesses with 0 - 19 employees
Non-profit Businesses with 0 - 49 Employees
Exempt from HCSO Exempt from HCSO

Employers can comply with the Employer Spending Requirement of the HCSO through various options, including:

  • Payments for health, dental, and/or vision insurance;
  • Payments into health savings/reimbursement accounts;
  • Payments to the City Option Program.

San Francisco City Option is one option to comply with the HCSO. If you participate in the City Option Program, you may choose to satisfy the Employer Spending Requirement in whole or in part by payments to our program.