Health Commission approves policy to transfer long‑inactive City Option funds to general fund after outreach

The San Francisco Health Commission voted to approve a policy that would allow inactive employer contributions to the SF City Option program to be transferred to the City’s general fund under California's in‑shipment (escheat) rules after a statutory dormancy period and notification process.

DPH Director of Managed Care Stella Chow told commissioners the program — established in 2008 as an employer option to meet the Healthcare Security Ordinance — has built up an unusual backlog of inactive accounts and unclaimed funds. DPH staff estimated roughly $104,000,000 in inactive funds (about 7.6% of total employer contributions historically), though the precise amount will be determined after the in‑shipment process runs.

Chow outlined a multi‑phase outreach plan: ramp communications and employer pilots beginning in April, continue targeted outreach through a statutory three‑year dormant window, and provide required public notices and a 45–60 day reinstatement period before funds would be in‑shipped to the City treasury. DPH plans improvements including simpler enrollment materials, employer engagement pilots, and use of third‑party data (TransUnion) to help locate account holders.

Commissioners raised concerns about reaching former employees of large, high‑turnover employers and about heirs or family members missing entitlements for older accounts. Sumi Sousa (San Francisco Health Plan) and Jen Louie (DPH CFO) explained that current practice has allowed restoration in the past but that in‑shipment would make some transfers permanent unless the account holder responds within the statutory window. Louie said once in the general fund, use of those dollars would be subject to ordinary appropriation by the mayor and Board of Supervisors.

Commissioner Guillermo moved approval; the Commission recorded a roll call of yes votes and passed the policy. DPH will begin employer and employee outreach pending implementation planning and subsequent steps with the Treasurer/Tax Collector to execute in‑shipment when the legal dormancy period and notice requirements have been met.

DPH committed to return to the Commission with progress updates and a plan for implementation steps required to move custody of funds to City Treasury accounts and to enable San Francisco Health Plan to continue claims and vendor payments under the new banking arrangement.