Pay or Play (POP) – A City of Houston Program for a Healthy Workforce

By: Enzo Mungu

Established on July 1, 2007 with Ordinance 2007-534 and governed by Executive Order 1-7, the Pay or Play (POP) program was introduced to serve as a solution to create a more level playing field, enhancing fairness in the bidding process between competing contractors who choose to offer health benefits to their workforce and those who do not. Considering the ever-soaring cost of health care/insurance, the POP program also accounts for the cost associated with the healthcare of uninsured citizens in the Houston and Harris County area. Recognizing this fact, the program seeks to offset the cost of caring for these uninsured residents.

How the program works is very much self-explanatory. A City of Houston contractor of a contract valued at or above $100,000 and/or a subcontractor of a contract valued at or above $200,000 can choose to either “pay” or “play”. To “pay” simply means City of Houston contractor(s) or subcontractor(s) agrees to contribute prescribed amounts ($1.00 per covered employee per regular hour for work performed under the contract with the City) to the Contractors Responsibility Fund (CRF) for their uninsured employee. To “Play” means City of Houston contractor(s) or sub-contractor(s) agree to provide their employees a minimum level of healthcare benefits.

Funds received as a result of the POP program in the CRF are used to support health programs such as the Client Access Program (CAP), the Emergency Telehealth and Navigation Program (ETHAN) and the Call Crisis Diversion Program (CCD), as well as the program’s administration costs. Combined, these health programs (CAP, ETHAN and CCD) provide affordable emergency medical resources, access to health benefits, and assist with finding social and medical services for City contractors and the uninsured.

There are various elements to the POP program, such as covered contracts, contract values, and types of contracts. Covered contracts are those contracts advertised after July 1, 2007 or executed on or after the effective date of Executive Order 1-7. Contract values applies to contracts valued at or above $100,000.00 (contract) and $200,000.00 (subcontract), including contingencies, amendments, supplemental terms and/ or change orders. Lastly, POP considers whether a contract is for professional service, construction, or general service. It is worth noting that POP does not apply to contracts which the primary purpose is procurement of property, goods, supplies, and/or equipment and any inter-governmental contract, inter-governmental agreement or purchasing cooperative. Additionally, all employees of a covered contractor or subcontractor, including contract labor, who are over age 18, work at least 30 hours per week, and work any amount of time under a covered city contract or subcontract, are subject to the program. There are available waivers/exemptions to the program enabling the contractor to neither pay nor play. Such can be given to a contractor upon approval by the respective city department.

The POP program’s administrative oversight is carried out by the Office of Business Opportunity (OBO), while contractor performance in meeting Pay or Play program requirements is managed by the contracting department. Each city department is assigned a POP liaison tasked with the above-mentioned responsibility and who can provide answers pertaining to the program.

As of FY 2012 through FY 2020, the POP program has collected an estimated $7.1 million from various contractors.

POP on the Web

Find helpful, updated informationabout the City’s Pay or Play Programat houstontx.gov/obo.

Click on the Pay or Play tab to access:

· POP liaison contact information

· Tutorials for the POP Management System (POPMS)

· Required POP forms

· Information about the Client Access Program (CAP)

CONNECT WITH OBO: Brianne Maxwell is OBO’s POP Program liaison. For more information about the POP program, contact brianne.maxwell@houstontx.gov or visit the Pay or Play tab at houstontx.gov/obo.