People are accustomed to making choices every day based on their personal preferences and individual tastes — from what they wear and drive to the restaurants they frequent. With the “individualization” of the market (think Amazon, Netflix, and DoorDash), more and more industries are serving up options to stay relevant in a world where choice isn’t just a nice to have, but the expectation.
It should come as no surprise that the health insurance industry is not immune to these expectations. In the past, employees were limited to a single health insurance option (selected by the employer) that did not necessarily address their individual needs. However, that model is quickly becoming a thing of the past and the private health exchange is leading the way.
What is a Private Health Exchange?
A private health insurance exchange gives employees access to multiple health plans through a single program. It enables you and your staff to individually shop, compare, and enroll in an array of coverage options and receive one bill for all of your employees’ insurance.
Many people became acquainted with insurance “exchanges” when the Affordable Care Act (ACA) was signed into law in 2010. The ACA created a national public health exchange and established the framework for states to take part or create their own state-run exchanges. California was among the first group of states with a state-run exchange.
However, California small businesses have been able to choose coverage through a private health exchange since 1996, when CaliforniaChoice opened its doors. The Word & Brown Companies’ co-founders John Word and Rusty Brown created the state’s first private health exchange and modeled it after large group and government employee insurance programs offering enrollees access to multiple health plans.
Choice Matters to Employees
Today’s workforce is dramatically different from the past. It’s fairly common to find a business with employees ranging in age from 20-somethings to baby boomers. Also, on the rise is workplace diversity of gender, religion, race, ethnicity, cultural background, sexual orientation, and language.
With so much to consider, it can be a challenge for employers to provide health insurance to an employee population with such variance. For example, the preferences and needs of an older, married employee are going to be vastly different than those of a younger, single person who is just starting out in the workforce.
An exchange program gives employees a way to find coverage that best fits their health care needs and budget. One employee might select a PPO because of a particular doctor or hospital in the PPO’s network. Another employee who rarely visits the doctor might choose a HMO. A third employee might select an EPO (Exclusive Provider Organization) plan because it has a slightly lower premium, but offers direct access to in-network specialists without a Primary Care Physician referral. A fourth employee might choose a Health Savings Account-compatible plan due to cost and tax considerations.
It is your employees’ choice when you offer them access to a private health exchange.
Cost Control for Your Business
In addition to offering you streamlined administration and one bill for all of your employees’ health coverage, a private exchange program also offers you the ability to control your employee benefits cost. The CaliforniaChoice exchange lets you set your own budget for benefits using Defined Contribution.
You decide what you want to contribute to your employees’ benefits. You can select between a Fixed Percentage (50% to 100%) of a specific plan and/or benefit, or a Fixed Dollar Amount for each employee. Employees then apply your contribution to whatever health plan and benefits they prefer. If employees selects a plan that costs more than your contribution, they simply pay the difference.
When you renew, you have the option to adjust your premium contribution – up or down – giving you complete control over your benefits cost for another 12 months.
Finding Coverage That’s Right for Everyone
Offering a greater level of choice to your employees — without increasing your cost as compared to a single health plan solution — sets a private health exchange apart from other health insurance options. It also gives your business a recruiting advantage and a powerful tool to retain your current employees.
If you have an employee benefits agent, ask about a private exchange quote for your business. If you’re not currently working with a benefits professional, go here to find a licensed expert in your area.
According to the federal National Health Interview Survey and the Kaiser Family Foundation (KFF), nearly 60 percent of America’s non-elderly population have health insurance through their employers. There’s no doubt, health insurance is highly sought after by employees. However, many employers are still unclear as to how group health plans provide distinct advantages to their business.
Here are 5 reasons why businesses choose Group Health Insurance for employees:
1. Employee benefits help in recruiting new employees.
A survey by the Harvard Business Review found that 88% of respondents would choose a job that offers a lower salary with better health, dental, and vision insurance over an opportunity with a higher salary but lesser benefits. Providing employee benefits sends an implicit message to job candidates that your business is competitive and financially stable – and it also shows you care about your employees, which can further set you apart in your recruitment efforts.
2. Benefits affect current employee retention.
Fifty-six percent of U.S. adults taking part in a 2018 SHRM survey said that a favorable opinion of their health coverage is a key factor in deciding whether to stay in their current job. Forty-six percent said health insurance was either the deciding factor or a positive influence in choosing their current job. Clearly, health benefits are among the most critical components of job satisfaction – second only to compensation.
3. Group Health Insurance helps reduce stress in the workforce and improve morale.
The Affordable Care Act (ACA) mandates that 10 essential health benefits be included in ACA-qualified health coverage:
- Ambulatory patient services
- Emergency services
- Pregnancy/maternity/newborn care
- Mental health and substance use disorder services
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Lab services
- Preventive and wellness services and chronic disease management
- Pediatric services (including oral and vision care)
Having comprehensive health care services can make a huge difference in the lives of your employees. The Annual U.S. Employee Benefit Trends Study by Metlife found that 74% of employees agree that having insurance provides peace of mind for the unexpected. It has been well-documented that happy employees are more productive and use less sick time, in addition to staying with a company longer.
4. Group Health Insurance offers tax benefits for employers.
Generally speaking, your expenses related to providing health insurance for your employees and their dependents are 100% tax deductible as an ordinary business expenses on your state and federal income taxes. Ask your employee benefits agent about the added benefits of a Premium Only Plan, which can reduce your payroll taxes and give employees the ability to pay their share of premiums with pre-tax dollars.
5. Group Health beats Blanket Health and Individual Health Insurance.
Group Health Insurance is, often, a better choice for your business and your employees than so-called Blanket Health policies because Group Health offers protection that is more comprehensive. As mentioned above, ACA-qualified plans include coverage for essential health benefits that are not part of Blanket Health plans. Typically, a Blanket Health policy offers coverage in connection with accidental injury. If it does cover broader health benefits, a Blanket Health policy may limit the amount it pays toward treatment or services – perhaps limiting coverage to $5,000, $10,000, or $50,000 for the life of the plan. The ACA prohibits health insurers from limiting coverage annually in qualified Group Health plans.
Group coverage may also beat individual insurance for two of the same reasons: no maximum benefits and continuous protection. Once you sign up, coverage will continue for one year as long as you pay the premium.
Finding What’s Right for Your Business
To learn more about the advantages of Group Health, talk with your insurance agent.
It’s no secret that Californians identify as being unique. From what we wear to what we drive, we take pride in standing out from the crowd. So, why should choosing health care be any different?
At CaliforniaChoice we celebrate your differences because we’re different, too. We believe there are five distinct advantages that make the CaliforniaChoice health insurance exchange unique among other companies in the market.
Greater employee choice
In the past, businesses have been limited to a single option for all employees. With CaliforniaChoice, you can offer coverage options from eight different health plans: Anthem Blue Cross, Health Net, Kaiser Permanente, Oscar Health, Sharp Health Plan, Sutter Health Plus, and Western Health Advantage.
More importantly, employees can choose their coverage option based on the 84,355 unique individual health care providers and 389 unique hospitals across the state. With so many choices, you and your employees have the ability to find a plan that best fits your individual or family health care needs.
How does this work in practice? One of your employees might select a PPO because of its doctor and hospital network. Another employee, who is looking for a lower copay, might select an HMO. A third employee might select an Exclusive Provider Organization (EPO) plan, because it offers a lower premium, but still includes access to specialists without a Primary Care Physician referral. A fourth employee might like the tax advantages of a Health Saving Account-compatible plan.
With CaliforniaChoice, it’s their choice – and you get a single bill for all employees’ coverage.
Being able to offer more choices to your employees is great, but what about cost? We have you covered there, too. Working with your broker and using Defined Contribution, you decide the amount you want to spend on your employees’ health insurance benefits. You can choose a Fixed Dollar Amount or a Fixed Percentage Amount toward a specific plan or benefit level.
Your employees use your contribution as a voucher toward the cost of the coverage they like best. If an employee chooses a plan that costs more than your contribution, he or she simply pays the difference.
Plus, your contribution is locked-in for 12 months, and you have the option to adjust it – up or down – at your renewal.
One crucial feature of CaliforniaChoice is the Smart Decision Technology that makes choosing health plans as easy as an Amazon search. There are several tools to help you and your employees find the health plan that best matches your individual or family health care needs.
- Automated Choice Profiler: Users can compare premiums, deductibles, and other out-of-pocket expenses to get an estimated total cost of coverage. You can view side-by-side plan comparisons based on costs and quality.
- Online Provider Search: We make it simple to find your preferred doctor. Just search by location, doctor’s name, hospital affiliation, or language(s) spoken. Now you can know in advance whether your doctor is part of the health plans you’re considering
- Online Rx Search: You can match your prescription drug needs to available CaliforniaChoice plans. It’s easy to look up medications alphabetically, by brand or generic drug name, therapeutic classification, or health condition.
Online enrollment is the easiest and most efficient way for your employees to enroll in their health plans. Transitioning to online enrollment will drastically improve the enrollment and renewal process for you and your employees.
Online enrollment speeds up plan comparisons, minimizes pending items, and reduces your overall case approval time. It also helps you track employee responses and identify those who have not yet enrolled. Because it includes built-in safeguards, online enrollment reduces errors and legibility issues, too, as well as the risk of personal information theft or loss.
Since benefits information is shared in the same way with all enrollees, there is reduced confusion – so you are likely to receive fewer questions. Online enrollment simplifies enrollment and makes the process more convenient for your entire organization.
CaliforniaChoice offers great health coverage for you and your employees, but it also delivers value-added benefits you won’t find elsewhere.
For eligible groups, our Business Solutions Suite offers additional perks at no cost:
- Premium Only Plan that allows employees to pay their share of premiums with pre-tax dollars – as well as a Flexible Spending Account that lets them put aside a portion of their earnings on a pre-tax basis to pay for eligible health care expenses.
- HR support powered by Mammoth HR, with alerts on regulatory changes affecting your business, training on topics like benefits and Workers’ Compensation, and customizable forms, job descriptions, and an employee handbook.
- COBRA participant invoicing, premium collection and remittance, payment tracking and processing of eligibility changes for non-payment, too.
You and your employees will both appreciate the steep discounts available through the Member Value Suite:
- Savings on movie tickets, theme parks, sporting events, travel, retail, and more through a free Cal Perks membership.
- Discounts up to 57% on Garmin® , Vitamix® , and Fitbit® products as well as a fitness center membership for just $25 a month through the ChooseHealthyTM program.
- EyeMed Vision One Eyecare discounts on frames, lenses, and eye exams at participating LensCrafters, Pearle Vision, Sears, and Target locations.
- Up to 80% off brand name and generic prescription drugs with the California Rx Card.
- Savings of up to 50% on hearing aids, tests, batteries and other devices through the EPIC Hearing Service Plan.
Get Help from an Agent
To learn more about what makes CaliforniaChoice the right choice – for your business and your employees – talk with your health insurance agent. If you do not already have an agent, you can search for one here.