Many employers cringe at the thought of having to offer California group health insurance to their employees. They feel as though the process is long, difficult, and overly expensive. Employers want to provide good coverage, but they do not want to bankrupt their company while doing so. On the flip side, many employees feel as though good health insurance should always be provided, and that employers should only choose plans that benefits employees the most, regardless of cost. CA group health insurance plans can offer great options for all parties involved. Below are the benefits of group insurance from both the employee and the employer’s prospective.
Benefits For The Employer
In 1992, The California State Legislature passed Assembly Bill 1672 to regulate health insurance companies operating in California. This piece of legislation modified the laws and made practices fairer for consumers. The major components of the bill included: allowing coverage for companies that have between two and fifty employees and are classified as either a sole proprietorship, an LLC, an LLP, or a corporation; guaranteeing insurance coverage for these companies; and imposing mandatory price limits on coverage.
These changes allowed employers to purchase benefit packages, at a fair price, with no question of coverage for all employees and their dependants regardless of health condition. Insurance companies could no longer deny or cancel coverage for individuals with a history of poor health as long as the coverage was purchased as a CA group health insurance plan. The mandatory price limits imposed on such coverage dictated that insurers had to limit the price range that could be charged for specific small groups. Insurance providers now had to base their pricing on the ages of the employees, and how the overall company fit into the established Risk Adjustment Factor (RAF) for the county it resides in. For example, if a company has all healthy employees, the insurance provider may offer a maximum reduction in price of up to ten percent below the set RAF. On the other hand, if the company has several employees with health conditions, the insurance provider cannot charge more than ten percent above the set RAF.
These legislative changes helped to put employer’s minds at ease, by allowing them to offer better coverage options without the worry of inflated costs.
Benefits For The Employee
Quite possibly the number one benefit for employees seeking group medical insurance in California is that he or she will not be denied coverage, even if he or she has pre-existing health conditions. Unlike with individual health insurance plans, small group plans cannot discriminate amongst employees or deny coverage for any reason.
In addition to not being denied coverage by the insurance company, employers must offer insurance to a certain number of workers. Employers who elect to go with a small group plan must offer coverage to, and must enroll, a minimum of seventy-five percent of all eligible employees. Employees are considered eligible if they work at least thirty hours per week. Only employees who are covered by another group plan (usually through a spouse’s employer) can opt out of the offered coverage.
Finally, employees do not have to worry about paying full price for health insurance. Employers cannot defer one hundred percent of the monthly cost of CA group health insurance to the employees. California state law states that an employer must contribute a minimum of fifty percent of the employee only cost of the insurance plan selected. This safeguard was put in place to further guarantee that participation requirements could easily be met and that fair business practices would be carried out.
While group medical insurance in California can be expensive, and it is sometimes difficult for a business owner currently offering no health insurance to begin paying $2,000 or more per month, there are several benefits for both parties. Lower rates, guaranteed coverage, price limits, and guaranteed renewal are benefits that are worthwhile for everyone involved.
Let the battle begin!!
Late on Saturday night, November 21, 2009, the Senate voted to begin debate on a healthcare reform bill. On a strictly party line vote of 60-39 the Senate vote allowed the debate that could change the future of America. The bill is aimed at providing health insurance for the uninsured citizens in America, whether they want healthcare insurance or not. Max Baucus (D-Montana) calls the bill the largest piece of social policy legislation since the great depression
There are many issues that are currently under debate within the 2000 page bill. The different bills that have come out of the different Senate committees contain many points of distinction, that all need to be discussed and voted upon.
The bill passed out of the Senate Health, Labor. Education, and Pensions (HELP) committee is billed as The Affordable Health Choices Act. It calls for the establishment of dozens of new agencies and commissions to regulate and monitor the healthcare of citizens. The non-partisan Congressional Budget Office (CBO) estimates the bill to cost less than $615 billion over 10 years. The bill requires:
- Everyone to obtain health insurance
- Mandates minimal coverage in every policy
- Prohibits denial for pre-existing conditions
- Eliminates annual or life-time caps on benefits
- No changes in existing plans
The bill will pay for the expanded coverage by:
- Fines of $750 per individual who does not comply (There are exceptions)
- Taxes on medical devices
- Savings from switching to medical Intelligent Technology (IT)
- Savings in fraud and abuse
- Promoting preventative care and healthy lifestyles
There are provisions for a ‘public option’ (really a government-run healthcare plan), with the option of states to opt out of the program if they meet certain requirements. The bill aims to make Americans healthier, have better access to healthcare, and to promote better and less costly healthcare to the average American. The bill claims to provide health insurance for up to 94% of all American citizens.
A separate bill was passed out of the Senate Finance committee in a 14-9 party line vote. The CBO estimates its cost at 856 billion over 10 years. The main differences between the Finance committee’s bill and the HELP bill are:
- No mention of a ‘public option’ in the Finance bill
- Tax on ‘Cadillac health insurance plans’
- Ban on federal funds for abortion
The latest polls show a declining support of the healthcare reform bills as they are currently being discussed in Congress. Rasmussen’s latest poll shows only 35% of Americans believe passage of the current healthcare bills would be better than no bill at all. 54% of those polled say no bill would be better than any bill introduced into congress thus far.
The main issues to watch as the bills undergo revisions and amendments are:
- Extent of ‘public option’ funding and opt-out provisions
- Federal funding for abortions
- Cuts in Medicare to pay for the Healthcare plans
- Mandates on minimal insurance policy requirements
- Penalties for not complying with the plan
We will keep you updated on the progress of these bills, any amendments, or revisions as the debate unfolds on Capitol Hill. We will also report on the latest poll numbers as Americans follow this process over the coming weeks.
The process of selecting California group health insurance coverage for your employees can be a very daunting task. Insurance by nature tends to be very confusing, convoluted, and down right frustrating. With today’s marketplace, and the present state of the economy, it has never been more important to offer proper benefits to both retain and attract employees.
The easiest way to begin the process of choosing the right CA group health insurance plan is to gain a firm understanding of the three most important components of insurance: benefits, providers, and price.
Benefits
Benefits can vary a great deal for group medical insurance in California. You can narrow down your options a great deal by first deciding how much coverage you want to provide to your employees. Determine what absolutely needs to be covered (preventative care, maternity care, routine screenings, etc.), and what other services could be covered (vision care, dental care, prescription drug coverage, etc.). Once you have set your basic guidelines, you will then need to consider the benefit package details. The most common options include: a comprehensive plan that covers everything except for a patient co-pay, which can range from $5 to $20 per office visit; a plan that utilizes an “out of pocket maximum” per employee, which means each employee or person covered on the plan has to pay out of pocket a certain amount before the insurance picks up coverage; a hospital co-insurance plan, which can range from one hundred percent to eighty percent coverage for most services; or a plan that covers basic medical care and offers a prescription co-pay plan for generic and most brand named drugs.
Providers
This is often the step where things get complicated. You should always try to choose a plan that includes the doctors that you and your employees want, and one that offers a large provider network. Having CA group medical insurance does not do anyone any good if they cannot keep their primary care physician, or if the network doctors are inconvenient and out of the employee’s area of residence.
Price
Price is always a major factor when choosing a group health insurance plan. While everyone wants the cheapest plan with most benefits, it is not always best to choose a plan simply because of a low cost. Take a bit of time and compare each plan; how do the plans compare to each other on a monthly cost basis? Are you sacrificing employee coverage and care just so you can save a few pennies? This certainly does not have to be the case. There are several ways you can lower the cost to you and your business, but still offer high quality health insurance to your employees. Consider these plan options: Stand Along Plans, Mix and Match Plans, Employee Buy Up Options, and Carve Out Plans.
Stand along plans allow you to offer more than one option to your employees so they can choose the plan that is right for their specific needs. For example, you may offer both a Health Net HMO plan and a Blue Cross Blue Shield PPO plan. The two plans would then “stand along” each other, and allow for the two options to “wrap around” coverage. This type of plan usually has minimum requirements.
Mix and match plans, sometimes referred to as an employee elect plan, offer more than one type of plan through a single insurance company. For example, one insurance provider may allow a group to purchase both their HMO and PPO plans. The company may supply employees with the less expensive HMO plan and give the employees the option of “buying up” (also known as an employee buy up option) to the more expensive PPO plan.
Carve out plans supply group health coverage only to certain types of employees (general workforce, managers, salaried employees, etc.). This option still allows companies to get the benefits of a group plan, but only incur the expense for covering a few of their employees. Businesses usually take on this type of plan to save money. CA group health insurance companies allow this practice, but with some limitations such as not guaranteeing that such a plan will be accepted by the company. California law allows insurance companies to decline coverage for carve-outs in order to protect the insurance companies from having to provide benefits only the sick people within a group. If the people you want to “carve out” to insure in your company are relatively healthy, this option could be a good strategy. It would provide some employees with health insurance yet keep the company’s total expenses to a minimum.
Selecting California group health insurance for your employees is not a process that should be rushed. Talk to your employees, study your bottom line, and take your time to ensure you make the best choice possible for you and your company.
