The Affordable Care Act Helps Small Businesses Buy Health Insurance
When the Affordable Care Act (ACA) was signed into law in 2010, it was heralded as a way to make affordable health insurance available to more people. Supporters also touted it as a vehicle to implement reform for the country’s private health insurance marketplace (especially for individuals and small group purchasers). That included coverage for individuals with pre-existing health conditions, which were not always covered under the patchwork of health plans marketed prior to the ACA.
While the ACA has been challenged in court several times since it went into effect, it is the law of the land, and it’s been able to deliver on its promise to expand coverage to more Americans. Before the ACA was implemented, California’s uninsured rate was 17.2% in 2013. In 2020, it was 7.1%. According to the California Health Care Foundation (CHCF), the ranks of the uninsured have decreased by 3.7 million since the ACA took affect.
The CHCF says 1.5 million Californians get coverage through the state’s public exchange, Covered California. Another 12.5 million are covered through Medi-Cal, the state’s Medicaid program. The CHCF says that number includes 3.7 million residents who have health insurance resulting from the coverage expansion of the ACA.
Nearly half (48%) of Californians with health insurance get their coverage through their employer, according to the Kaiser Family Foundation (KFF). KFF is an American non-profit organization focused on health care issues and the nation’s role in global health policy; it is not affiliated with the Kaiser Permanente health plan.
Public and Private Exchanges Expand Choices
The ACA introduced public exchanges to much of the country more than a decade ago. California’s public exchange, Covered California, offers individual and family coverage as well as coverage for small business. Employers (and their employees) can choose from HMO and PPO plans from Blue Shield of California, Health Net, Kaiser Permanente, Oscar, and Sharp Health Plan.
California’s longest operating private health exchange, CaliforniaChoice, has been serving small businesses in the Golden State for 25 years. The CaliforniaChoice exchange opened its doors in 1996 – expanding options for employers looking to give employees a greater role in selecting health coverage that best meets their individual or family health care needs.
Today, CaliforniaChoice offers everything you and your employees want in a benefits program:
- Nine health plans to choose from (Eight plans are available for coverage effective in 2022)
- Cost control though Defined Contribution – you choose what you want to contribute to your employees’ plan premium: a fixed percentage (50% to 100%) or a fixed dollar amount
- Greater access to doctors, specialists, and hospitals – 80,000+ doctors and 400+ hospitals
- Dental, Vision, Chiropractic, and Life benefits can be easily added to any CalChoice plan
- Business Solutions Suite – no-cost services like HR support, Flexible Spending Accounts, COBRA or Cal-COBRA billing services, and Premium Only Plans for your employees
- Member Value Suite – access to outstanding savings for your employees on Dental, Vision, and Hearing services, entertainment, wellness, prescription drugs, and more
- Easy admin + consolidated billing – one bill each month for all employees’ coverage and one website and one toll-free number to manage your benefits
- Smart Decision Technology – making it easy to find the right health plan for your needs, search for a doctor in your plan network, and identify plans that include coverage for vital prescription drugs; you can even go paperless with online enrollment for employees
- Simplified renewal – maintain current coverage or change to a different plan at renewal; you can even adjust your premium contribution for employees; the choice is yours
Essential Health Benefits
One of the added benefits of the ACA is that it standardizes what must be included in individual and small group plans marketed as ACA compliant. This makes it easier for you to compare plans, knowing that compliant plans must include these Essential Health Benefits:
- Ambulatory patient services
- Emergency services
- Pregnancy, maternity, and newborn care (before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services (including chronic disease management)
- Pediatric services, including oral and vision care for children (adult dental and vision services are not essential health benefits)
Because insurers are required to include coverage for these essential benefits, when you shop you know plans in the same ACA metal tier offer comparable features and coverage. The four ACA metal tiers are Bronze, Silver, Gold, and Platinum. Each tier offers a different level of support for covered services, ranging from 60% of health care costs for Bronze plans, 70% for Silver plans, 80% for Gold plans, and 90% of costs for covered services under a Platinum plan.
The ABCs of HMOs, PPOs, and EPOs
Whether you get your employee coverage directly through an insurer, through a public or private exchange, or with the assistance of a broker, you will likely have a range of plan types available. Among the most popular options are Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans. Both have been around for decades. The Kaiser Family Foundation’s 2020 Employer Health Benefits Survey reports a 47% penetration rate for all firms for PPOs, while the penetration rate ranged from eight percent to 31% for other plans (HMO, Point of Service, and High Deductible Health Plans with a savings option). Those numbers have shifted somewhat from 2015, when PPO enrollment was five percent higher and most other enrollment was lower.
Exclusive Provider Organization (EPO) coverage is somewhat new, and it is a sort of hybrid between an HMO and PPO. An EPO offers a local network of doctors and hospitals from which members can choose; however, it often limits benefits outside the network. EPOs do allow members to self-refer to specialists who are part of the EPO network. Outside the network, there may be no or limited coverage. In California, Anthem Blue Cross and Oscar, as well as the Cigna + Oscar joint venture include EPO options in their portfolios.
Shopping for Your Business and Employees
The best way to learn about affordable local coverage available to you and your employees because of the Affordable Care Act is to talk with an employee benefits broker. Using a broker does not cost you more – and it can often help you save on your employees’ health coverage. That’s because your local broker will be familiar with providers that are part of each of the health plans available in your community. If you don’t have a broker, we can help you find one here.