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As you consider health insurance options for yourself — and for your employees — you may be wondering what makes one health plan choice the right one for you. This article spotlights PPOs, and offers information about new choices coming in Summer 2020 from Anthem Blue Cross.

What is a PPO?

A preferred provider organization (PPO), also sometimes called a participating provider organization or preferred provider option, is a health care plan with a network of health care professionals who have an agreement with an insurer or a third-party administrator to provide health care at pre-negotiated, reduced rates. The doctors, specialists, and hospitals are considered preferred providers for the health plan with whom they are contracted.

PPO Advantages

PPOs account for more than one-third of the enrollees in small group health plans in California, and more than a quarter of all commercial plan enrollment (individual, small group, and large group). A PPO is attractive to many people because it offers participants greater freedom to seek care from any in- or out-of-network health care provider. Typically, the premiums for PPO coverage are greater than for an EPO or HMO, but for some individuals and families, the added cost is worth it.

There are no required referrals for seeing a specialist when you have PPO coverage. You can book an appointment directly with a doctor. If he or she is in-network, you’ll pay a preferred rate for your office visit or other care. If the specialist is out-of-network, you will pay more. Likewise, if you or your employees need to go to a hospital for care, you can make the appointment yourself; no referral is necessary. If you use a lot of specialists or specialized services, or if you require hospitalization, some people find a PPO is a better choice because it offers greater flexibility.

Networks: In general, PPO networks tend to be broader, which gives you and your employees access to more doctors and hospitals. The Anthem Blue Cross PPO options offered through CaliforniaChoice give you access to three Affordable Care Act (ACA) metal tiers and multiple provider networks, as shown below.

Anthem’s Prudent Buyer network is one of the largest health care provider networks in California and nationwide.

New 7/1 Options from Anthem

For groups looking for coverage effective on or after July 1, 2020, CaliforniaChoice is expanding its PPO options available through Anthem Blue Cross. Four new plans are being added – three with access to the Anthem Prudent Buyer network and a fourth offering access to Anthem’s Select PPO network. The new plans are available in the Gold, Silver, and Bronze metal tiers, including one with a Health Savings Account (HSA).

If that isn’t enough, also beginning with coverage effective in July, CaliforniaChoice is offering you and your employees two Triple Tier options. That means you can offer them access to three metal tiers: Bronze, Silver, and Gold plans or Silver, Gold, and Platinum. That gives them even more choices when it comes to in-network doctors, specialists, and facilities plus out-of-network providers, too.

With CaliforniaChoice, one employee might select a Gold tier PPO because of a particular doctor or hospital in the PPO’s network. A second employee might select a Silver tier EPO (Exclusive Provider Organization) plan because it offers a slightly lower premium, but offers direct access to in-network specialists without a Primary Care Physician referral. Another employee who rarely visits the doctor might prefer a Bronze tier HMO. A fourth employee might want a plan with an HSA.

It is your employees’ choice when you offer them access to a private health insurance exchange like the CaliforniaChoice multi-carrier program, which has been helping California small businesses since 1996.

Cost Control for You

The CaliforniaChoice exchange lets you determine how much you want to spend on employee benefits. It’s what is called Defined Contribution.

You decide what you want to contribute toward the cost of your employees’ benefits – a Fixed Percentage (50% to 100%) of a specific plan and/or benefit, or a Fixed Dollar Amount for each employee. Each of your employees then applies your contribution to the health plan he or she prefers. If an employee chooses coverage under a plan that costs more than your contribution, he or she simply pays the difference.

At renewal, you have the option to adjust your premium contribution – up or down – giving you control over your employee benefits cost for another 12 months.

Talk to a Broker to Learn More

If you want to learn more about the PPO, EPO, HMO, and other health plan options available through CaliforniaChoice, talk with your employee benefits agent. If you don’t have one, we make it easy to find a licensed insurance professional. Go here to find one in your area.

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Advance Health Care Directive Links Included

At CHOICE Administrators, we are committed to providing small businesses and employees with support and information as we all deal with the impact of the COVID-19 pandemic.

We’ve developed a single COVID-19 Resources document that includes a range of information to help you and your employees navigate through this difficult time. It includes:

• COVID-19 Overview Information
• Situation Updates
• Information for Businesses
• Information for Families and Households
• Information for Community Events and Gatherings
• Social Media Resources

You can download our PDF here.

In addition, members of our CaliforniaChoice small group, multi-carrier private health insurance exchange and our ChoiceBuilder multi-carrier ancillary exchange have additional COVID-19 resources available through our partner, Mammoth HR.

Additional information from Mammoth is available behind login through www.calchoice.com and www.choicebuilder.com. You’ll find sample communications to employees, telecommuting resources, and links to various federal resources including the Centers for Disease Control and Prevention (CDC) and Occupational Safety and Health Administration (OSHA), as well as state and local resources, where available.

Federal Resources

Tools and information are also available from the U.S. Department of the Treasury, Internal Revenue Service (IRS), U.S. Chamber of Commerce, and U.S. Department of Labor (DOL):

• Coronavirus Emergency Loans – Small Business Guide and Checklist (Chamber of Commerce)
• PPP Information Sheet for Borrowers (Treasury)
• FFCRA Poster, FAQs (DOL)
• FFCRA Fact Sheet for Employers: Employee Paid Leave Rights (DOL)
• FFCRA Fact Sheet for Employers: Employer Paid Leave Requirements (DOL)
• FFCRA Poster, Employee Rights (DOL)
• FFCRA Temporary Non-Enforcement Bulletin (DOL)
• Navigating Paid Sick and Family Leave Tax Credits FAQs (IRS)
• CARES Act Assistance for Small Employers (Treasury)

Advance Health Care Directive Form

The spread of COVID-19 has prompted many across California, and the nation, to consider their planning for major health care decisions. Even if you and your employees are not dealing with COVID-19 or any other major health concern at this time, it’s important to plan for the future. What if you were sick and in need of emergency medical treatment? What if you could not speak for yourself about your health care preferences? How would your medical professionals and family member know what course to pursue?

An Advance Health Care Directive (also known as a living will or personal directive) can provide loved ones with the information needed to make decisions that are in line with your or your employees’ wishes. Having preferences documented can relieve some of the burden for friends and family.

A legal document, the Advance Health Directive form goes into effect only if you become incapacitated and unable to speak for yourself. It can be replaced as often as needed in the event of health changes, or if you change how you want things to be taken care of if you are unable to direct them on your own.

There are numerous sources of an Advance Directive. You can ask your company counsel or personal attorney for a form, which you can share with interested employees, or you can visit or direct others to one of several websites, including those listed below:

• AARP
• Office of the California Attorney General
• eForms
• California Courts: The Judicial Branch of California
• California Hospital Association

Information from Your Insurer

If your employees are currently covered by a group health insurance plan, your insurer, administrator, or health plan may offer additional tools and resources. Contact your broker for information. If you don’t have broker, we make it easy to search for one here.

In mid-April, the Kaiser Family Foundation (KFF) released a Data Note on 2020 Medical Loss Ratio (MLR) rebates, which are due to groups and individuals later this year. Under the Affordable Care Act (ACA), an insurer is required to use a specified percentage of each premium dollar received to pay for medical claims and activities that improve quality of care.

For small business and individual health insurance policies, the MLR is 80%, which leaves 20% of premium revenue to go toward administration, marketing, and profit. The MLR is higher for large group insurance plans, which must spend 85% of premium dollars on claims and quality improvements.

Insurers that fail to meet the required MLR must pay rebates to customers. MLR rebates are based on a three-year average, which means that 2020 rebates will be paid based on insurers’ financial data for 2017, 2018, and 2019. Rebates can be given to customers via a premium credit or a check. For those insureds with employer-based coverage, the rebate can be sent to the employer – with checks distributed in the fall.

According to a U.S. Department of Labor bulletin and the Society for Human Resource Management (SHRM), employers’ responsibility for rebate distribution depends on who paid for the coverage. For example, if the employer paid the entire cost, no part of the rebate is due to participants. If participants/employees paid the entire cost, they are due the full rebate. If the cost is shared, employers and employees are due a proportional share of any rebate. Employers can either distribute rebates to employees or apply them toward future premiums, taking into consideration potential tax reporting (for rebates paid directly to employees) as well as the cost effectiveness and administrative feasibility of distributing funds received.

KFF reported that preliminary insurer data compiled by Mark Farrah Associates projects companies will issue a total of nearly $2.7 billion in rebates this year – nearly double the record $1.4 billion distributed last year. In 2020, about two billion dollars will go to individual market insureds, while small groups will receive $348 million and large groups will be rebated $341 million. Healthcare Dive says individual rebates will average $420 and enrollees in large groups will average $110. Small groups will be rebated the most – an average of $1,850 each. Final rebate data is expected this summer, as insurers must finalize their numbers by the end of the July with payouts due in September.

CaliforniaChoice just expanded the health care choices available to you and your employees. Our new Triple Tier includes Bronze, Silver, and Gold. Here’s how it works:

Triple Tier is the most popular option for CaliforniaChoice groups because it delivers something for everyone.

• Provides employees with the most plan choices and price points to satisfy their needs.
• Employees can buy up or down, allowing an employer to keep costs low without limiting choice to employees.
• Encourages increased participation by employees by offering a lower-cost option for employees wanting to enroll their dependents.
• Offers more at renewal! Triple Tier is a great way to offer new options to employees without disrupting current plan availability for your group.
• There’s no cost to offer Triple Tier, and there’s no participation requirement for any Tier.
• Offers more PPO and EPO options if you have employees residing out-of-state.

Best of all, offering Triple Tier does not cost you more. That’s because you decide what you want to spend on employees’ health care with Defined Contribution. Your contribution is the same for each employee regardless of how many ACA metal tiers are offered, or what tier and plan each employee chooses.

How ACA Metal Tiers Work

Under the Affordable Care Act, there are four metal tiers. Each offers a different level of cost sharing between the health plan/insurer and the covered employee (or dependents).

For employees who want to minimize their monthly premium, or those who may not need a lot of medical care, a Bronze or Silver metal tier Health Maintenance Organization (HMO) plan may make sense. CaliforniaChoice offers HMO plans through four statewide and four regional health plans: Anthem Blue Cross, Health Net, Kaiser Permanente, Oscar Health, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage.

For an employee who wants access to a broader network of doctors and specialists, an Exclusive Provider Organization (EPO) plan may offer a good balance between affordability and provider access. CaliforniaChoice offers EPO plans in all four ACA tiers: one in the Bronze tier and two in the Silver tier from Anthem Blue Cross as well as 11 plans in all four metal tiers from Oscar Health. Currently, Oscar is available regionally in California.

Across all tiers, carriers, and health plans, CaliforniaChoice offers 10 PPO, 14 EPO, and nearly 70 HMO options statewide. With CaliforniaChoice, employees can choose what they want – and you still control your annual costs.

Talk to a Broker to Learn More

Contact your employee benefits broker to learn more about the expanded Triple Tier options from CaliforniaChoice – and all of your insurance choices. If you do not have a broker, search for one here.