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Effects of the San Francisco Employer Health Spending Mandate


San Francisco implemented a major health initiative in 2008, becoming the first city to put into practice a pay-or-play employer health spending mandate and creating Healthy San Francisco, a "public option" to promote affordable universal access to care. The health spending requirement is in addition to a requirement San Francisco instituted in 2006 for firms to provide paid sick leave to workers. This research combines public and new survey data sources to illustrate how employers in San Francisco reacted to the Paid Sick Leave Ordinance and the Health Care Security Ordinance. The identification strategy of this research relies on a difference-in-difference framework, comparing trends in San Francisco to trends in surrounding counties and other large MSAs using a spatial discontinuity approach before and after implementation of the mandate as well as reporting descriptive data on San Francisco trends. Evidence from the first year of implementation of the Health Care Security Ordinance and the first two years after implementation of the Paid Sick Leave Ordinance shows that employer benefit mandates are feasible, and can expand benefits without significant job or earnings loss. There is significant demand for the public option in San Francisco, with little evidence of crowd-out of private insurance.

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