Posted 4 weeks ago - by

$138M to be Available to 100,000+ Employees in San Francisco during the COVID-19 Pandemic

Mayor London Breed has announced plan to allocate $138 million to support over 100,000 employees during the COVID-19 pandemic. The funds come from the SF City Option Medical Reimbursement Accounts, which, prior to the announcement, could be used only for eligible medical expenses.

With Mayor Breed’s Supplemental Declaration, MRA funds contributed by their employers to MRAs, in compliance with San Francisco’s Health Care Security Ordinance (HSCO) can now be used for food, rent, mortgage payments utilities, and other basic needs during the declared local emergency as well. Each covered employee stands to receive an average of $1,300 each.

“Our priority during the COVID-19 pandemic is to protect public health, and an important part of ensuring our residents are healthy is making sure people have enough to eat, have a roof over their head, and have the peace of mind that they’ll be able to pay their bills at the end of the month,” said Mayor Breed. “We know that having access to food and housing is a basic need, and by giving people access to the funding in these accounts, we are helping keep people healthy and safe during this challenging time.”


1. For employers’ compliance

The HCSO requires for-profit businesses with 20 or more employees and nonprofits with 50 employees or more to make Health Care Expenditures (health insurance, Medical Reimbursement Accounts, City Option payments, etc.) on behalf of their employees, which can be used for eligible medical expenses.

One option for employers to satisfy their HCSO Health Expenditure Requirement is through the SF City Option, which covers a wide range of San Francisco employees, including employees in the retail, accommodation, and food service sectors.


2. Reminders regarding SF City Option contributions on behalf of employees

Employers who have made contributions on behalf of their employees to SF City Option Accounts should take note of the following:

  • You may inform your employees that they are now eligible to request a one-time disbursement of their available funds to help pay for necessary expenditures during the declared local emergency.
  • You may direct employees to the San Francisco City Option website to find the most updated information about disbursement.
  • You may inform employees that the SF City Option program will contact those who are eligible with information about how to withdraw their funds. You should also ensure that your employees (1) are cautious about disclosing personal or financial information, and (2) are aware that the SF City Option will never request Social Security Numbers or banking information from them.


3. Additional important HSCO reminders

  • Per Mayor Breed’s Emergency Proclamation (February 25, 2020), employers are not required to submit the 2019 Annual Reporting Form for the Health Care Security Ordinance. However, this only means that the 2019 Annual Reporting Form does not need to be submitted to the Office of Labor Standards Enforcement.

  • You must continue to make health care expenditures on behalf of your covered employees. The deadline for Q1 2020 expenditures is April 30, 2020.
  • HCSO-mandated health care expenditures are not a tax, and therefore there are no deferrals for these expenditures.

Is there anything Payroll Systems can help you with as you work on payroll adjustments to ensure your employees get the help they need? Reach out and talk to us about easy-to-scale solutions you need for your business.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.