San Francisco workers could lose $240 million in healthcare funds

A dental bill, a new pair of glasses, a lactation pump or even a wheelchair could be paid with money many San Francisco workers do not know they have. The city says roughly $240 million in dormant healthcare reimbursements could be swept into public coffers in 2026 unless eligible workers claim their SF City Option balances first.

The money is not general cash, but it can be used for health, dental and vision insurance and for more than 100 out-of-pocket medical expenses, including crutches, wart-removal treatment and COVID-19 tests. Workers whose employers contribute through SF City Option are offered a San Francisco Medical Reimbursement Account, or SF MRA, which holds those funds for eligible healthcare costs.

SF City Option was created in 2008 by the San Francisco Department of Public Health after the Board of Supervisors approved the Health Care Security Ordinance in 2006. City documents say employers can use the program to meet the ordinance’s employer-spending requirement, and city guidance says payments to City Option are one way to comply.

The city began moving toward escheatment, the process of transferring abandoned funds to the government, in January 2022, when the San Francisco Health Commission approved a policy for inactive accounts. City officials said at the time that the first escheatment was likely to happen in calendar year 2026, after the three-year waiting period required under California Government Code Sections 50050 et seq.

The scale of the program is large. A 2022 city presentation projected about $104 million in the first round of escheatment, or roughly 7.6% of total employer contributions. A 2024 memo updated that picture, saying that as of July 2024, about $1.9 billion in employer-spending-requirement contributions had been paid into SF City Option by about 5,100 employers for nearly 460,000 employees.

City officials describe escheatment as a last resort meant to address the buildup of unclaimed money. The city also maintains an unclaimed-funds list for SF City Option accounts, and says listed funds have been inactive for at least three years and will be escheated if not claimed.

For San Francisco workers, the message is simple: the money exists, it is tied to health costs, and once the deadline passes, the city can take what remains unused.