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March 2009

Court of Appeals Denies Rehearing in San Francisco Employer Health Fee Case

On March 9, 2009, the Ninth Circuit Court of Appeals rejected the request of the Golden Gate Restaurant Association for a rehearing before a larger panel of the court’s judges in the Employee Retirement Income Security Act of 1974 (ERISA) case upholding San Francisco’s assessment on employers to fund a local health access program (Golden Gate Restaurant Association v. City and County of San Francisco). A majority of the court’s 48 judges voted to deny the request, while eight judges dissented on the ground that the original appeal decision was inconsistent with ERISA precedent, including a 2007 ERISA holding by the Fourth Circuit that invalidated a Maryland employer ‘pay or play’ law. The restaurant association has indicated it will seek Supreme Court review of the case. In the meantime, the Court of Appeals’ original 2008 decision applies in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington and can be useful precedent in other states. For an analysis of the decision’s implications, see “Including Employer Financing in State Health Reform Initiatives: Implications of Recent Court Decisions” (Patricia Butler, January 2009) as well as a recent webinar on this subject.