If you’re considering health insurance for your small business, you may find there are many forms and documents used in the process. Some of these you are probably already familiar with – like those used by the Internal Revenue Service (IRS) and the State of California. Others may be less familiar. Here, we’ll take a quick look at the some of the most-common documents and how you and your employees may use them in connection with employee benefits.
State of California DE 9C: Quarterly Contribution Return and Report of Wages
Under California law, employers are required to report specific information periodically, including quarterly wage reporting. The quarterly wage report form (DE 9C) is used bypaper rain many carriers in connection with your employer application for employee health benefits.
The quarterly report is available in both print and electronic format. Right now, employers with 10 or more employees are required to electronically file this form. Beginning January 1, 2018, all employers will be required to file electronically. More information about how you can file and manage payroll tax accounts online is available at www.edd.ca.gov/e-Services_for_Business. Information on the state’s e-file mandate is available at www.edd.ca.gov/EfileMandate or in the California Employer’s Guide (state form DE 44).
An employer application is the first document you’ll complete with the help of your broker. It provides the information needed to qualify your business to offer employee health insurance benefits. All health insurance carriers, including CaliforniaChoice (see the sample CaliforniaChoice employer application here), require you to complete the form, which asks for information, including:
- Employer name, address, company structure (corporation, sole proprietorship, partnership, S Corporation, LLC, or other), and workers’ comp carrier (and policy ID)
- Enrollment and eligibility (requested effective date, pay periods annually, employee count, current coverage (if any), waiting period, etc.)
- Selected Affordable Care Act Metal Tier (Bronze, Silver, Gold, Platinum, or a combination) for the next year
- Premium Contribution (percentage of cost or fixed dollar amount)
- Statement of Compliance
Some applications also include the option to provide benefits like Dental, Vision, Chiro, and Life Insurance or a Section 125/Premium Only Plan (POP), which will allow employees to pay for their health insurance with pre-tax dollars from their paychecks. (A POP also reduces your payroll taxes. Your broker can give you all of the details.)
Explanation of Coverage (EOC)
This document, provided by the insurance carrier or administrator, offers a complete explanation of all of your health plan’s benefits. (It is sometimes also called a Summary of Benefits and Coverage or SBC.) While it is not your actual insurance policy, the EOC/SBC is a useful easy-to-read summary of plan benefits. It outlines what’s covered and what is not included. It also has examples of what you might pay for certain health services, keeping in mind any deductible, co-payments, and other out-of-pocket costs. All EOCs/SBCs must follow a standard format, including a glossary of terms. That makes it easier for you to compare plans and costs.
Explanation of Benefits (EOB)
Once you and your employees are enrolled in a health plan, you’ll receive an Explanation of Benefits (EOB) from your insurance carrier after each visit to a health care provider. The EOB is an overview of the total charges for your visit and a summary of how much you and your health plan will pay. Your EOB is not a bill; it’s provided to tell you know how you (and your covered dependents) are using your coverage. If you have co-pays or co-insurance due as part of your visit to a doctor, hospital, or other health care service provider you may get a bill.
If you have questions about your EOB, you should contact your health plan. If you think you’re being charged for tests or services covered by your plan, you may be able to file an appeal. The insurance carrier will review your request and provide a written response.
Employer Administrative Guide
During the coverage year, it’s inevitable that you’ll be presented with a question or situation that needs clarification. Some may come from your employees, asking about the benefits of their specific health plan. Others may come from you or someone who helps you manage your staff about how to apply administrative procedures or policies.
An administrative handbook is designed to help guide you through different procedures and answer general questions about your benefits program.
If you choose CaliforniaChoice for your employee benefits, the CaliforniaChoice Employer Administrative Guide is a great resource with information on:
- Benefits administration basics
- Frequently asked questions
- How to make changes to your policy
- Billing basics
- And more
Employee Enrollment Guide
All carriers and private exchanges provide an enrollment guide for employees. This is the piece your employees will be most interested in, since it summarizes their available health plan options and provides information about costs and how to enroll. It’s very useful in helping employees understand their available benefits, and a great resource before they make their benefits selection. (You can see the CaliforniaChoice employee guide here.)
Change Request Form
When you need to add or cancel coverage or add a dependent to an employee’s existing coverage, this is the form you’ll need. It may sometimes also be used to add or change voluntary or optional benefits, like Dental, Vision, and Life Insurance.
IRS Form 1095-C: Employer-Provided Health Insurance Offer and Coverage
If you’re an employer with 50 or more full-time or full-time equivalent employees and you currently provide health insurance benefits, you’re probably familiar with this IRS form. (To learn about how the IRS defines full-time and full-time equivalent employees, visit the IRS website.)
If you have fewer than 50 full-time or full-time equivalent employees or you do not currently offer employee health benefits, you may not know about this form. It’s used by employers to give notice to employees each year about their eligibility for health benefits. The form summarizes health coverage offered to employees and, in some cases, includes information about whether an employee or dependent is enrolled in this coverage.
Employees are not required to file Form 1095-C with their tax returns; however, the form is useful to employees in determining the months in which they or their dependents are covered by a health plan for purposes of determining any individual shared responsibility penalty due to the IRS, as a part of the Affordable Care Act.
If you are interested in learning more about any of the above-described health insurance and related forms, or if you’d like a health insurance quote for employees at your small business, we can help you find a CaliforniaChoice broker.
Health insurance and employee benefits can be complicated. To make your life just a little easier, we’ve compiled some of the most-frequently asked questions from business owners who already offer employee benefits, but who are still left wondering what’s going to happen in Washington, DC, regarding repeal or changes to the Affordable Care Act (ACA). Hopefully, you’ll find these answers helpful to you, your business, and your employees.
Q1. Do I still have to offer health insurance for my employees even though Obamacare might be going away?
The ACA is still the law of the land, and that means some employers are required to offer health insurance benefits to their full-time and full-time equivalent employees. While this mandate generally applies to businesses with more than 50 employees, many other employers with fewer workers choose to offer health insurance as part of their broader employee benefits and retention program. Ask your employee benefits broker – or connect with a CaliforniaChoice broker – to find out if your business is subject to the ACA’s Employer Shared Responsibility Provision. (Click here for information from the Kaiser Family Foundation on employer penalties under the ACA for not offering coverage.)
Q2. What’s the best way to shop for employee benefits even though I’m already offering health insurance to my employees?
The best way to look for benefits is always to connect with a health insurance broker. They will provide information and guidance to you at no cost and answer your benefits questions, discuss the cost-controls benefits of Defined Contribution, and help you make sense of all the buzzwords and changing health care regulations under the ACA.
Q3.How do I avoid annual premium increases for my employees’ health insurance? Are there ways for me to control my costs?
Using an employee benefits broker can help you avoid premium increases and find alternative options. Your broker will also be able to discuss different approaches you can take to gain greater over your benefits budget. That could include switching from your current funding strategy for benefits to a Defined Contribution strategy.
At CaliforniaChoice, we offer you flexible budget options and up to 12 different ways to define your employee benefits budget. And you can take comfort in knowing the rates for your employees are locked in for 12 months.
Q4. If Obamacare gets repealed, how will my benefits change? What are the differences between Obamacare and Trumpcare?
Nothing has changed yet. So, it’s important your business continue to comply with the ACA (if you’re an Applicable Large Employer subject to the employer mandate).
Several different measures have been introduced in the U.S. House of Representatives and U.S. Senate. The White House would like to see a full repeal of the ACA; however, that seems less likely after the Republican-controlled Senate failed three times during the week of July 24 to approve different proposals.
Here’s a snapshot of some of the differences between Obamacare and Trumpcare. Keep in mind, though, right now no one knows for sure what changes could, ultimately, be approved by Congress and signed into law by the president.
50+ Groups Must Offer Coverage to Full Time and Full-Time Equivalent Employees
Coverage Required for Most Americans or They Must Pay a Penalty to IRS
No mandate to have coverage; no penalty for not having insurance
Essential Health Benefits
The ACA has 10 categories of services that health insurance plans must cover; these include doctors’ services, inpatient and outpatient hospital care, prescription drugs, pregnancy and childbirth, mental health services, and others.
|Yes; same Essential Health Benefits apply nationwide; no state variations||
No; states would be allowed to scale back conditions that must be covered by plans sold within their borders
Pre-existing Conditions Covered
|Yes; the ACA requires that premiums be set without regarding to whether a person has a pre-existing health condition (people with and without health issues are charged the same)||
Not necessarily. Because states can opt-out of Essential Health Benefits (described above), a person with a current health condition could have to pay more to get coverage for a pre-existing condition.
|Older Consumers Charged More Than Younger Enrollees||Yes; insurers can charge older consumers no more than three times the rate for a younger insured||
Yes; insurers can charge older consumers no more than five times the rate for a younger insured
Q5. Can I change health plans for my business at any time – or do I have to wait for open enrollment?
Yes, you can make changes to your plan at any time. However, you will likely have to change carriers if you make a coverage change. With most insurers, you cannot change within the same program before your schedule renewal date.
The best time to shop and compare your options is in the 45-60 day period before your next scheduled open enrollment (ahead of when your current plan is slated to end). That gives you time to speak with a broker and actively look at the market and all of your available coverage options for the next year.
Many employers like the CaliforniaChoice multi-carrier, employee-choice program because it gives you access to dozens of options from seven different health insurance carriers: Anthem Blue Cross, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage.
And you get a 12-month rate lock on your premium, so you’ll be better able to manage your employee benefits budget. CaliforniaChoice is a program that grows with you, so you’re free to shop and compare at any time, and if you want to make a change, you and your employees can still stay within the CaliforniaChoice program.
Q6. If I offer multiple health plan options for my employees, will I get bills from different companies?
That depends. If you purchase coverage directly from the carrier, you’ll get a monthly invoice from each carrier for your employees’ benefits. However, if you select CaliforniaChoice, you’ll receive a single invoice for all of your employees’ coverage, no matter how many different health plans in which they are enrolled.
Q7. Do my employees and I pay more if my business buys coverage through a broker?
No. When you work with a broker you pay nothing for their services. They actually get paid from the program you decide to go with, so it makes sense for you to always use a broker during the decision making process.
Q8. How do I add more people to my group coverage?
If you are currently insured, whether your coverage is written directly through a carrier or through a multi-carrier program like CaliforniaChoice, when you have a change in coverage (such as a new hire or a current employee has a baby, gets married or divorced, etc.), you’ll probably use a New Quote Request form or Change Request form. Ask your carrier or broker for details. CaliforniaChoice forms can be found here.
Q9. How can I find out more about offering a multi-carrier program to my employees?
You can get more information about the CaliforniaChoice multi-carrier, employee-choice program from your employee benefits broker. He or she will want to get a current employee census that includes each employee’s birth date (and the birth date for insured dependents if you offer spouse and dependent coverage). The more information you provide, the more accurate your quote will be.
If you don’t already have a broker, we can help you find a CaliforniaChoice broker to speak with about a quote for your employee benefits.
If you’re looking to change your current health insurance benefits for employees – or you’re considering offering health insurance benefits for the first time – there are some key questions you need to ask as you investigate options for your business.
What Plan (or Combination of Plans) Is Right for My Business?
There are many types of health insurance plans available: Preferred Provider Organization (PPO) plans, Health Maintenance Organization (EPO) plans, Exclusive Provider Organization (EPO) plans, and Health Savings Account (HSA) compatible plans. You might even consider a multi-carrier private exchange that offers all of these. With any type of fully insured plan, you pay a premium and the insurance company assumes the risks and pays claims related to your employees’ covered health care services. Many businesses prefer a fully insured plan because it helps them avoid unexpected costs in the event of dramatic health claims. Talk with your broker about what you and your employees are looking for and he or she will work with you to determine what plan or plans might work best for your business.
Is a Single Carrier Best or Are Multiple Carriers Better?
More and more, small and midsized employers are choosing to get coverage from a health insurance exchange, which offers you and your employees access to multiple carriers through a single program. With a multi-carrier exchange, you and your employees have the ability to choose from more plan types and more carriers, so each of you can find coverage to match your individual or family health care needs. For example, the CaliforniaChoice private exchange, which has been available to small businesses in California since 1996, offers dozens of EPO, HMO, PPO, and HSA-compatible plans from seven health insurers: Anthem Blue Cross, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage. This program gives employees the ability to choose the health insurance plan that best fits their specific needs and budget.
How Can I Control My Health Care Costs?
One of the often-cited reasons employers like private exchanges is Defined Contribution, which gives you the ability to set the amount you want to spend on health benefits for your employees each year. You can choose either a fixed dollar amount or fixed percentage of the costs of coverage – for example, 50% of the lowest-cost plan. Whatever amount you choose, it’s locked in for a year. That gives you complete control over what you spend on your employee benefits. If an employee selects a health plan that costs more than your generous contribution, he or she simply pays the difference. At renewal, you have the option to adjust your contribution – up or down – which gives you continued control over your budget for the next year.
What About Administration – Will It Be a Lot of Work for Me or My Staff?
When comparing benefits and insurers, two other things to consider are ease of administration and the availability of added, no-cost benefits. Maybe you’re worried about how much time you’ll spend on administration. If you offer multiple plans, or plans from different carriers, does that mean multiple bills you’ll have to pay each month? Or, perhaps, you want to offer Dental, Vision, or other benefits like Life Insurance for your employees, but you’re concerned about the costs. Another advantage offered by a private exchange is streamlined administration. If your business has 10 employees, it’s possible to offer them a range of health plans and still get just one bill for all of their coverage. You can also offer other benefits – often at little or no added cost. CaliforniaChoice, for example, offers discounted dental, vision, and hearing services through its no-cost Business Solutions Suite as well as a range of affordable employer-sponsored and voluntary benefits. And administration is easy – with one phone number and one website for assistance.
One Final Consideration: Choosing the right health insurance and benefits partner is important. If you don’t already have an employee benefits broker, we can help you find a CaliforniaChoice broker to speak with about health insurance for your business and your employees.
Employers in San Joaquin County who choose an Exclusive Provider Organization (EPO) Medical Plan from Anthem Blue Cross for employees’ health care get access to some of the region’s leading providers: Dameron Hospital (Sutter), Doctor’s Medical Center, Hill Physicians, San Joaquin General Hospital, St, Joseph’s Medical Center, Sutter Gould Medical, and Sutter Tracy.
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Health insurance can be complicated. That’s especially true for a small business owner if you’re just starting to think about adding health insurance for your employees. Below are some of the most-frequently asked questions that small businesses are asking when starting to consider health insurance for employees. Hopefully, these will help you, too.
Q1. Do I have to offer health insurance for my employees?
Maybe. The Affordable Care Act (ACA) requires businesses with over 50 full-time employees to offer health insurance benefits. If your business has fewer than 50 employees, then it is not mandated that you offer benefits. However, many businesses with fewer than 50 employees in California still offer health insurance benefits – they’re a great way to attract talented employees!
IMPORTANT: the definition of a full-time employee by the ACA is someone who works 30 hours a week, but it’s a bit more complicated than it seems. The ACA offers a calculation to determine how large your business is, which is why you should connect with a health insurance broker to determine whether your business is officially considered a large business (50 employees or more).
Q2. How much is employee health insurance going to cost ME?
The amount you spend on your employees’ health coverage is up to you. Working with your broker, you have the ability to set the amount you want to spend.
You can choose a fixed dollar amount or a fixed percent of the costs – for example, 50% of the lowest-cost plan. That means, if you’re offering multiple options to choose from and the least expensive option has a premium of $100 per month, you must contribute $50 per employee per month. And the premium amount you decide to contribute toward employee benefits is locked in for 12 months.
Q3. How much will insurance cost MY EMPLOYEES?
Your employees will use the amount you contribute to their benefits. In a program like CaliforniaChoice, employees have a big selection of different health insurance carriers and plan options to choose from. If employees select an option that costs more than your contribution, they simply pays the difference. Think of it like this: you’re basically giving each of your employees a health care voucher to use at a health insurance mall. They use your voucher on the option they like best!
Q4. Do I have to pay when my employees go to the doctor?
No. This is a common misconception for employers purchasing health insurance for the first time. As the business owner, you are only responsible for paying the amount you and your broker determine to be your “contribution” toward employee benefits. So, if your contribution is $50 per employee and you have 10 employees, your monthly premium is $500 – that’s it.
When your employees visit the doctor, they are responsible for the costs associated with the health insurance plan benefits they select.
Q5. What are the basic differences between an HMO, PPO, EPO, and HSA-qualified plans? What are the pros and cons of each?
There are a number of different health insurance plans to choose from, but HMOs, PPOs, EPOs, and HSA-qualified plans are some of the most common. Let’s take a look:
HMO is the short-hand reference to a health maintenance organization. An HMO provides health care through a network of physicians, hospitals, and other health care providers contracted directly with the HMO. Most often, with an HMO, a member has a Primary Care Physician who acts as the first source of contact for treatment and referrals. Other than for emergency care, if you see a health care professional outside of the HMO’s network or without prior authorization from a Primary Care Physician, treatment may not be covered.
PPO refers to a Preferred Provider Organization, which also operates through a network of participating doctors, medical groups, hospitals, and specialty facilities. PPOs typically cost more than HMOs, but they offer more flexibility when members seek treatment, and they have fewer restrictions when it comes to using out-of-network providers. (PPOs pay more if you go “in network” but also allow benefits for your out-of-network health care.)
An EPO – or Exclusive Provider Organization – is similar to an HMO. It provides benefits only if care is rendered by a health care provider within a specific network. (This exclusivity provision may be waived for emergency situations.)
HSA: If you choose a High Deductible Health Plan, you may also want to give your employees an option to fund a Health Savings Account. This gives them the ability to pay for qualified health care-related expenses with tax-free dollars before their health plan kicks in and begins to pay for care.
A big advantage in offering the CaliforniaChoice multi-carrier private exchange to employees is access to multiple HMO, EPO, PPO, and HSA-qualified plans. This allows them to pick the coverage that’s right for their individual or family health care needs and budget. One employee might pick a PPO because it includes his or her preferred doctor or hospital in the health plan network, while another employee who rarely visits the doctor might choose an HMO. A third employee might choose an HSA-compatible plan because of its cost and tax advantages. Whatever your employees’ needs may be, it’s their choice!
Q6. Do I pay more if I use a broker than if I go directly to an insurance plan?
Absolutely not. Contrary to what you might think, using a health insurance broker doesn’t cost you anything. In fact, you could actually save money because an experienced broker will have the expertise and technology to help you find the most competitive benefits for your company, while also ensuring you and your employees have access to the doctors, hospitals, and other health care providers you want. Brokers are paid a commission for the products they sell, so you won’t pay an added fee for using a broker.
Q7. Can I get health insurance for myself only?
Coverage is available from some health plans for owner-only, sole proprietorships, and husband-wife groups. Ask your broker for details.
Q8. Who do I work with to look at my health insurance options?
Because of the complexity of health insurance, many employers find it advantageous to shop for employee benefits with help from an employee benefits broker. An experienced broker can offer you professional counsel at no cost to you. He or she will answer your questions, discuss the advantages offered by Defined Contribution, and help you make sense of the jargon that’s common in the health and insurance industry.
An independent broker is just that, independent; you can expect him or her to work with you to find you the best-available plan for your organization, your employees, and your budget. And, a broker can help you evaluate “extras” that might be available, such as optional coverage (like Dental or Vision), online enrollment, or other services (like a Flexible Spending Account, Premium Only/Section 125 Plan, COBRA services, etc.).
Don’t forget, in general, expenses you incur for employee health benefits are 100% tax deductible as ordinary business expenses on both your state and federal income taxes.
Q9. How can I get started?
If you want to get a quote for employee benefits for your business, you can begin by providing your broker with a current employee census. Quotes are based on each employee’s actual age, so your census should list all persons to be covered and their individual dates of birth. This will ensure a more accurate quote. Your broker will also ask you to complete some other forms and agree to a 50% contribution for each employee’s coverage. Then he or she will work with you to schedule an employee meeting or online enrollment, so each employee can sign up for their preferred coverage.
If you don’t already have an employee benefits broker, we can help you find a CaliforniaChoice broker to speak with about a quote for your business. CaliforniaChoice offers health insurance coverage from seven of the state’s leading health insurance carriers.