A three-judge appeals panel of the United States 9^th Circuit Court of Appeals ruled Tuesday that Gov. Schwarzenegger’s effort for a universal healthcare program in San Francisco does not violate federal regulations on employee benefit programs.

The ruling put an end to a suit by a local restaurant association that said the San Francisco Health Care Security Ordnance violated federal laws on employee benefit programs.

The ordinance came into effect on January 9 and it rules that employers offer health insurance, contribute to health reimbursement accounts or pay a fixed fee to the Healthy San Francisco program if they have 20 employees or more in the case of for-profit entities or upwards of 50 employees in non-profit organizations.

The Healthy San Francisco programs uses funds obtained in this manner to run a series of local clinics and a county level hospital where patients without health insurance get treated.

While the ruling is a major building for the idea of a unified health plan system, which many considered impossible until Healthy San Francisco proved them wrong, others such as Kevin Westlye, the director of the restaurant association, warn that the precedent set could lead to a ‘patchwork of conflicting state and local laws’ relating to health insurance benefits employer contributions. The association will appeal the ruling, either to the entire 9^th Circuit or the US Supreme Court.

San Francisco mayor Gavin Newsom, who counts among the supporters of the program, however stated that "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."