San Francisco’s landmark universal health care program won considerably on Tuesday when a panel of federal judges found that San Francisco had the right to charge employers to help pay for its universal health care plan.

To be more specific, a three-judge panel for the U.S. Court of Appeals in Pasadena ruled Tuesday that fees charged to employers under the 10-month-old San Francisco Care Security Ordinance do not violate federal laws regulating employee benefit programs.

The San Francisco ordinance, which took effect Jan. 9, requires companies with at least 20 workers to offer health insurance, set aside funds in health reimbursement accounts or pay a fee to the city’s Healthy San Francisco program. Nonprofit employers with 50 or more staffers are also covered. Payments from restaurants and other businesses are expected to contribute between 15 to 20 percent of the approximately $229 million needed to fund the program each year. The plan is also funded by city money and payments from people who are enrolled.Healthy San Francisco program is the first plan in the country to offer universal coverage, which provided basic medical care to 30,000 uninsured city residents in less than a year. Previous estimates put the city's uninsured population at about 82,000.

But the Golden Gate Restaurant Association, the trade organization for city restaurants, sued San Francisco in 2006 over the health plan, arguing that its requirement that businesses pay a fee violated a federal law that gives employers a choice in how to provide health coverage. The law is known as Employee Retirement Income Security Act, or ERISA and took effect in 1974.

Kevin Westlye, the restaurant association’s executive director, said his organization continued to believe that the San Francisco ordinance was expensive and burdensome to employers. He added that many restaurants are currently covering their new health insurance costs by putting a surcharge of 3 to 6 percent on their customers’ bills in order to survive.

On the other hand, supporters of Healthy San Francisco say their local program should be a model for the state and the nation.

“Today’s ruling is a huge victory for the city and for the 46 million Americans who don’t have health insurance. San Francisco is proving that it can be done. By thinking outside the box, every city and state in this country can provide health insurance if they are willing to challenge the conventional wisdom,” Mayor Gavin Newsom, a supporter of the program, said.

Dennis Herrera, San Francisco’s city attorney also praised the court’s ruling, which recognized the flexibility of San Francisco’s health care program.

Westlye said his organization planned to appeal the court’s ruling arguing that “many counties and states will pass their own employers expenditure rulings” if the court’s ruling stands “going against why Congress passed ERISA in the first place.”