CA Small Business Health Insurance Plans
California Small Business Health Insurance Plans 2023. The following is an overview of the rules that govern small group health insurance plans in the State of California.
The information that is discussed below includes the laws that have been mandated by the Affordable Care Act (ACA or "Obamacare"), as well as the laws that are required by California State government.
If you own and operate a CA small business and you already offer small group health insurance or you're thinking about offering small group health insurance - this guide can help you better understand the regulations, requirements and available California small business health insurance plans available.
Learn how to get California small business health insurance plans for 1 to 50 employees. The best small business health insurance providers in CA offer affordable rates, flexible coverage options and access to a large network of medical providers.
Below are some answers to commonly asked CA small business health insurance plan questions:
- How Much Does California Small Business Health Insurance Cost?
- What Are The Small Business Health Insurance Regulations In California?
- Does California Participate In The Affordable Care Act?
- What Are The Affordable Care Act Requirements For California Small Businesses?
- How Are CA Health Insurance Premiums Are Determined?
- What Types Of Health Insurance Plans Are Available For California Small Businesses?
How Much Does California Small Business Health Insurance Cost?
The average price of a standard California small business health insurance policy ranges from around $583 to over $1706 per employee per month based on; single or family, location, coverages offered, deductibles and more.
What Are The Small Business Health Insurance Regulations In California?
In California, more regulations are imposed on health insurance than many other states. As such, if you're a small business owner in CA, it is important to understand these regulations so that you can made the best California small business health insurance plans choices for yourself and your employees.
In California, health insurance companies can either be licensed in the state or they can be unlicensed. In order to be licensed, a health insurance company must abide by the regulations that have been established by the state; therefore, for your peace of mind, it's in your best interest to choose a licensed company. With that said, it's still important to be familiar with the fundamentals health insurance regulations in CA.
Companies that sell health insurance policies in California can base their decision to sell you a policy on the health of your small group. They can also use the health of your group as the premise for the rates that they will charge.
As such, California health insurance companies can deny applications, if they see fit; furthermore, they can charge you higher rates if the health status of the group is poor.
While health insurance policies can be canceled if premiums haven't been paid or fraud has been committed, health insurance companies cannot use illnesses or injuries that require medical care as the grounds for terminating plans.
Also, California health insurance companies can impose pre-existing condition exclusion provisions, which state that the company does not have to cover the cost of medical care provided for pre-existing conditions during a specific period of time; however, the exclusion period is limited and depends on how many people are covered under the small group plan.
Conditions are considered "pre-existing" if they are diagnosed or treated before the health insurance plan is effective.
According to Department of Health Care Services, the expansion of Medi-Cal allows California to make significant strides toward supporting a healthier, more productive state. Medi-Cal also assists the most vulnerable among us, whose circumstances may prevent them from accessing health coverage or vital health care services.
Does California Participate In The Affordable Care Act?
In 2010, the Affordable Care Act (ACA or "ObamaCare") was passed by the United States Congress and was signed into law by Obama. Following its passage, provisions of the law have continued to be phased in, and as of January 1, 2014, the majority of American citizens and legal residents of the United States are required, by law, to have qualifying health care coverage.
If they fail to have coverage, they are responsible for paying an annual tax penalty for each month they aren't insured, which is known as the "individual mandate".
The cost of the penalty for failure to have qualifying coverage is $95 per adult and $47.50 per child, or 1% of your total taxable income; whichever amount is higher - as much as $285 per family. In 2017, the penalty increased, and has continued to increase thereafter.
Qualifying Exemptions For The Individual Mandate
Individuals who meet one of the following are exempt from the individual mandate and the associated tax penalties in CA:
- Illegal aliens
- Jailed individuals
- Religious objections
- The cost of health insurance coverage is higher than 8% of your household income
- Those who aren't covered for less than three months during the calendar year
- Those who have hardship waivers
- Your income level is blow the 100% poverty level
What Are The Affordable Care Act Requirements For California Small Businesses?
If you're a small business owner in California, you must provide your employees with insurance. This is a requirement that was put into place by the Affordable Care Act.
Referred to as the Employer Shared Responsibility provision, all employers must offer their employees at least one of the ACA-compliant California small business health insurance plans, otherwise then can face fines of up to $2,000 per employee.
California small business owners can purchase coverage for their employees through the state's Small Health Option Program (SHOP) exchange, or from a private insurance agent or broker.
Affordable Care Act Standardized Essential Health Benefits
As per the ACA, all qualifying health insurance plans must offer 10 standardized essential benefits.
Depending on the state, additional benefits may also be required. The 10 ACA standardized essential benefits are as follows:
- Ambulatory patient services (medical care that is offered without being admitted to a hospital)
- Emergency services
- Hospitalizations, such as overnight stays and surgical procedures
- Lab services
- Mental health and substance abuse disorder services, including behavioral health treatments, such as psychotherapy and counseling
- Pediatric health care services, including vision and oral care; however, adult vision and dental coverage aren't essential health benefits under ACA
- Pregnancy, maternity, and newborn care, including before and after birth
- Prescription pharmaceuticals
- Preventative and wellness services, as well as management for chronic diseases
- Rehabilitative and habilitative services and devices, including services and devices for injuries, disabilities, and chronic health conditions
Additional Health Benefits Mandated In California
Not only do California small business health insurance plans have to offer coverage for the ACA essential standardized benefits listed above, but they must also include coverage for the additional benefits that have been mandated by the state. These additional benefits include the following:
- Ambulance/emergency transportation
- Clinical trials for cancer
- Coverage for the effects of diethylstilbestrol
- Diabetes management, including education and treatment
- Hospice services
- Laryngectomy-assistive devices
- Mastectomy-related services
- Off-label prescription pharmaceuticals
- Organ transplants for HIV-positive patients
- Reconstructive surgery
- Treatment for TMJ disorder
Standardized California Small Business Health Insurance Plans
In order to make it easier to compare costs and benefits, the Affordable Care Act has designated all qualifying California small business health insurance plans to be one of four metal colors, including Bronze, Silver, Gold, and Platinum.
Each of these designations is based on the average amount of health care costs that the plan will cover, which is illustrates at percentages of how much the insurance company will cover for health care, as well as the amount the insured will have to pay out-of-pocket.
All insurance companies that are participating in the federal or state health care exchange program must offer at least the Silver and Gold California small business health insurance plans.
All four of the metal plans have a shared maximum out-of-pocked amount that the insured can be charged during any calendar year. The following table illustrates this information:
|Metal Plan||Insurer Pays / Insured Pays|
|Bronze||60% / 40%|
|Silver||70% / 30%|
|Gold||80% / 20%|
|Platinum||90% / 10%|
As per the ACA, individuals cannot be denied coverage or charged higher premiums because of their past health history, or their gender.
Additionally, look-back and waiting periods cannot be imposed. Additionally, policies are effective when they are issued and all coverage is renewable if the individual chooses to renew the policy.
However, plans can be canceled if the individual fails to pay their premiums or commits fraud.
How Are CA Health Insurance Premiums Determined?
A premium is the amount the insured must pay out-of-pocket in order to maintain their health insurance policy. The premiums that are charged for any of the qualifying metal plans can be based on the following:
- Age of the individual
- Whether or not the individual uses tobacco
- Where the individual lives, based on a rating area
- The number of family members who will be enrolling
What Types Of Health Insurance Plans Are Available For California Small Businesses?
While there are several types of health insurance plans to choose from, the following plans are the most popular among CA small business owners:
Health Maintenance Organization - Simply known as an "HMO", this type of plan offers a variety of health-related services via a network of health care providers and hospitals that exclusively contract with the HMO, or who agree to offer their services to members of the HMO. Employees who participate in this type of plan usually have to choose a primary care physician (PCP), and receive most of their care from this physician. If a specialist is needed, the PCP will recommend one that is affiliated with the HMO.
Preferred Provider Organization - More commonly referred to simply as "PPO", this type of health insurance plan is the most common among California small business owners. The insurance company provides a preferred list of health care providers, and employees must receive their medical care from the doctors and hospitals on that list for their claims to be paid at the highest level possible - but they also have the flexibility to see any other provider anywhere in or out of state.
Point-of-Service Plan - Known as a (POS), this type of health insurance plan provides access to health care services at a lower overall cost, but with fewer choices. Members can access care from in-network or out-of-network providers and facilities, but coverage is better when you stay in-network. POS plans may vary, but generally, plans are considered a blend of HMO and PPO plans - offering more flexibility than HMOs, but less than PPOs.
Health Savings Account - A health savings account (HSA) is a special type of bank account that allows participants in the insurance plan to save money that can be used specifically for the medical care they require in the future. HSA-qualified health insurance plans are usually PPO plans that are specifically designed to be used with an HSA.
Indemnity Health Insurance - This type of health insurance plan allows members to control their own health care and to visit any doctor or hospital they choose. The insurance company would then pay a pre-determined percentage of the total charges for the services that were rendered. Employees may have to pay for some types of services up-front and then they can submit a request for reimbursement with the insurance company.
California Small Business Health Insurance Plans - The Bottom Line
We strongly advise business owners to speak with a CPA and a CA health insurance broker before jumping in and getting any type of the California small business health insurance plans available.
Make sure that you know exactly what each option can do for your company and the potential drawbacks associated with it.
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Learn about California small business insurance requirements for general liability, business property, commercial auto & workers compensation including CA business insurance costs. Call us (323) 484-2100.
Small Business Health Insurance Plans By State
You can find more state specific small business health insurance information including requirments and coverage by clicking on the state below:
- North Carolina
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- Washington D.C.
- West Virginia