Recently, the 2026 San Francisco Health Care Security Ordinance (SF HCSO) expenditure rates were released, which are increased annually and vary based on employer size.
For 2026, medium-sized covered employers must spend $2.74 per hour payable (up to a maximum of $471.28 per month, based on a maximum of 172 hours payable) and large covered employers must spend $4.11 per hour payable (up to a maximum of $706.92 per month, based on a maximum of 172 hours payable) on their covered employees’ health care.
The new 2026 rates, as compared to the 2025 rates, are outlined below:
| 2026 Rates | 2025 Rates | |
| Small Employers (0-19 employees) | Exempt | Exempt |
| Medium Employer (20-99 employees) | $2.74/hour (max $471.28/month) | $2.56/hour (max $440.32/month) |
| Large Employer (100+ employees) | $4.11/hour (max $706.92/month) | $3.85/hour (max $662.20/month) |
As a reminder, SF HCSO requires covered employers to spend a minimum amount on covered employees’ healthcare. For more information on who qualifies as a covered employer, which employees are covered by the ordinance, and other employer obligations under the SF HCSO regulations, we recommend employers review the SF HCSO website, SF HCSO administrative guidance, and accompanying regulations. Please note that Sequoia clients have access to additional guidance and resources on this topic through the Sequoia Platform.
Employer Takeaways
- Determine if your organization qualifies as a covered employer under SF HCSO.
- Review which employees are subject to the ordinance for the upcoming plan year.
- Develop a strategy to meet the 2026 health care expenditure requirements.
Additional Resources
Connect with a Sequoia consultant to learn how Sequoia’s compliance services are integrated in our benefits services and tailored solutions. And if you’re already a Sequoia client, stay on top of your employer obligations with your Compliance Checklist that highlights important compliance dates, action items, and resources.
The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog. © 2025 Sequoia Consulting Group. All Rights Reserved.
