Demystifying the Healthy SF Surcharge: A Comprehensive Guide to Financial Wellness

March 22, 2024

Understanding the Healthy SF Surcharge: A Comprehensive Overview

As a financial professional, it is important to stay abreast of various financial regulations and taxes that affect businesses and individuals alike. One such regulation that has garnered attention is the Healthy SF Surcharge. The Healthy SF Surcharge is a local healthcare program implemented in San Francisco, California with the goal of providing affordable healthcare options to residents. In this article, we will explore the details of the Healthy SF Surcharge, its purpose, how it works, and how it affects businesses and individuals.

The purpose of the Healthy SF Surcharge

The primary goal of the Healthy SF Surcharge is to ensure that all San Franciscans have access to health care services, regardless of employment or immigration status. Launched in 2008, the program serves as a safety net for individuals who do not qualify for public health insurance programs such as Medicaid, Medicare, or the Affordable Care Act. By requiring employers to contribute to the Health Fund, the Healthy SF Surcharge aims to provide affordable health coverage to those who would otherwise be unable to afford it.
The surcharge funds collected from employers are used to support the Healthy San Francisco Program, which provides a range of health care services, including primary care, preventive care, and prescription drug benefits, to eligible San Franciscans. This ensures that individuals without health insurance have access to essential medical services and maintain their well-being.

How does the Healthy SF Fee work?

The Healthy SF Surcharge applies to businesses that do business in the City of San Francisco. Employers with 20 or more employees (or 50 or more employees for nonprofit organizations) are required to contribute to the Healthy SF program on behalf of their employees. The surcharge is calculated based on a percentage of an employee’s wages, and the exact rate is determined by the San Francisco Office of Labor Standards Enforcement (OLSE).
Companies have the flexibility to choose whether to pay the entire premium on behalf of their employees or to share the cost with their employees. If the employer chooses to share the cost, it must contribute a minimum percentage, while the employee’s share is deducted from their paycheck. The amount of the supplement should be clearly stated on pay stubs to ensure transparency and compliance with the law.

Implications for businesses

The Healthy SF Surcharge has significant implications for businesses operating in San Francisco. By requiring employers to contribute to the health care fund, the program places an additional financial burden on businesses, especially those with large workforces. The surcharge can impact a company’s profitability and may require adjustments to budget allocations for health care expenses, potentially impacting other aspects of business operations.
In addition, companies must carefully navigate the legal and compliance requirements associated with the Healthy SF Surcharge. It is critical to stay informed about the current surcharge rate as determined by the OLSE, ensure accurate calculations, and maintain proper documentation. Failure to comply with the surcharge requirements can result in penalties and legal ramifications that can further drain a company’s financial resources.

Implications for Individuals

For individuals living in San Francisco, the Healthy SF Surcharge has both benefits and considerations. On the positive side, the program provides an opportunity for individuals without health insurance to access affordable health care services. It ensures that primary care, preventive care, and prescription drug benefits are available to those who might otherwise face financial barriers to health care.
However, individuals should be aware that the Healthy SF Surcharge may affect their take-home pay. If the employer elects to share the cost of the surcharge, employees will see a deduction from their paychecks, reducing their total income. It is important for individuals to understand their rights and responsibilities with respect to the surcharge, to review their pay stubs regularly to ensure accurate deductions, and to seek clarification from their employer or the appropriate authorities if any discrepancies arise.

In summary, the Healthy SF Surcharge plays a critical role in providing affordable health care options for San Franciscans. While it has financial implications for both businesses and individuals, it aims to bridge the healthcare gap and ensure that everyone has access to essential medical services. Staying informed about the requirements, complying with the regulations, and understanding the financial implications are critical for businesses and individuals operating under the purview of the Healthy SF Surcharge.


What is Healthy SF surcharge?

The Healthy SF surcharge is a fee imposed on certain businesses in San Francisco to help fund the city’s healthcare program known as Healthy San Francisco.

Which businesses are required to pay the Healthy SF surcharge?

The Healthy SF surcharge applies to businesses in San Francisco with 20 or more employees. These businesses are required to contribute a certain amount per hour worked by each employee towards the healthcare program.

How is the Healthy SF surcharge calculated?

The Healthy SF surcharge is calculated based on the number of hours worked by each employee. The specific amount to be paid per hour is determined annually by the San Francisco Office of Labor Standards Enforcement (OLSE) and is subject to change.

What does the Healthy SF surcharge fund?

The funds collected through the Healthy SF surcharge are used to support the Healthy San Francisco program, which provides access to healthcare services for uninsured residents of San Francisco. The program offers a range of medical services, including primary care, preventive care, and prescription drugs.

Are there any exemptions or exceptions to the Healthy SF surcharge?

Yes, there are certain exemptions and exceptions to the Healthy SF surcharge. Businesses that are exempt include those with fewer than 20 employees, nonprofits, and government entities. Additionally, there are exemptions for certain industries, such as retail and restaurant businesses with a certain level of revenue or transactions.