May 01, 2020
On April 28, 2020, Mayor London Breed announced a plan to allow employees in San Francisco to use funds in their medical reimbursement accounts (MRAs) to pay for necessities such as food, rent, and utilities while the local COVID-19 emergency remains in effect, in addition to eligible health care expenses.
Making contributions to MRAs under the San Francisco City Option program is one way for employers to comply with the City’s Health Care Security Ordinance (HCSO). In general, the HCSO requires San Francisco employers with at least 20 employees (regardless of location), to make quarterly expenditures on behalf of its covered employees to be used for providing or reimbursing health care service related expenses. Covered employees are generally those who work an average of 8 hours per week for businesses and non-profits within the geographic boundaries of San Francisco.
There is currently over $138 million in available funds in MRAs belonging to approximately 104,000 employees, or an average of $1,300 per employee. Eligible employees will be able to request a one-time disbursement of their available funds. According to the Mayor’s declaration, the City Option program will notify these employees regarding how to withdraw their funds.
Information regarding the San Francisco City Option is available here. For information regarding coronavirus resources available to San Francisco businesses and employees, please visit the City’s COVID-19 homepage.
For additional information, please contact your Burnham Benefits Consultant or Burnham Benefits at 949-833-2983 or firstname.lastname@example.org.
Burnham Benefits does not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with the Patient Protection and Affordable Care Act and other applicable federal and state law requirements, and is based on Burnham Benefit’s interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.