A civil grand jury in San Francisco criticized city restaurants that have been profiting – by an average of 46% – by adding surcharges to customer’s bills to allegedly cover health insurance for employees.
“The jury calls for the end of this gratuitous practice of allowing business owners to add surcharges to recover the cost of employer mandates,” the group said while releasing its report, according to press reports. “Additionally, the jury recommends the elimination of employer Health Reimbursement Accounts (HRAs) in favor of the city option since the city cannot effectively police the rampant abuse of HRAs.”
The grand jury explored compliance with the Health Care Security Ordinance, which requires most businesses and nonprofit employers to spend some of their revenue on health insurance for employees, found that most employers were profiting from the charge. The San Francisco Public Press reported on the situation in November 2011.
Exactly 16 of the 18 restaurants surveyed profited, with the average profit about 46%, according to the 19-member grand jury, which called on city officials to prohibit the surcharges and eliminate employer Health Reimbursement Accounts (HRAs).
“The jury found that a growing segment of restaurant establishments are profiting from the practice of adding a surcharge to the bill of every customer,” the report said. “These same employers are legally able to reclaim funds intended for employee health care thus increasing their profits even more. This blatant capture of funds is at the expense of their employees, and their customers who believe they are paying surcharges for healthcare.”
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