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The 9th U.S. Circuit Court of Appeals turned down an appeal in which a restaurant group sought to have an expanded 11-judge panel review the legality of an employer-spending mandate.
Golden Gate Restaurant Association spokesman Kevin Westlye said the group will now appeal to the U.S. Supreme Court.
Westlye said, "We think this issue is of national importance."
The program, known as Healthy San Francisco, aims at providing coordinated health care to the estimated 60,000 uninsured city residents who aren't covered by other government programs.
Part of the cost -- an estimated $12 million out of $200 million annually -- is paid by employers, who have a choice of either setting up a health insurance plan for their workers or making payments directly to the city.
The restaurant association contends the employer-spending provision conflicts with a U.S. law regulating employee benefits.
Last September, a three-judge panel of the 9th U.S. Circuit Court of Appeals rejected that argument. The panel said providing health care services to low-income residents "has long been the province of state and local governments."
The restaurant group then asked the circuit court to have the ruling reviewed by an expanded 11-judge panel. But the court today denied that request. The group's planned appeal to the U.S. Supreme Court will be the final legal step in the case.
Healthy San Francisco spokeswoman Eileen Shields said the program, which expands on an existing system of public health facilities and community clinics, now serves 35,000 residents.
The spending mandate requires businesses with 20 to 99 workers to spend $1.17 per hour per worker on either a health plan or fees to the city.
Companies with staffs of more than 100 must pay $1.76 per hour.
Other funding for the program is provided by city, state and local governments and a sliding fee for patients.
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