Golden Gate Restaurant Association challenged the law, contending the city did not have the power to force businesses to provide insurance. The 9th U.S. Circuit Court of Appeals heard oral arguments from both sides on April 17.

The 2006 law, meant to provide some form of coverage for the half of the city's 73,000 uninsured citizens who work, has pushed more businesses into providing either direct medical payments or insurance, the Wall Street Journal reported Monday.

"They've made more progress than anyone expected," Larry Levitt, vice president of the Kaiser Family Foundation, told the paper.

But, it has also created difficult choices for some.

Mexican restaurant Tres Agaves has added a note to its menu explaining a 3.5 percent charge to cover health costs while owners of Cole Hardware, with a staff of 95, have cut back on hiring so the company doesn't push itself into a more expensive large company bracket, which starts at 99 workers.