Hello!!

Two years ago, California joined the ranks of jurisdictions with an individual mandate for health insurance coverage. The five others with a mandate in place in 2020 were the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont.

Below are five things employers should know about the California mandate.

1. The State Requirement Differs from Fed

The “Individual Shared Responsibility Provision” of the Affordable Care Act (ACA) required most Americans to maintain health insurance or pay a fine. However, the fine for not having insurance was removed by Congress as part of the Tax Cuts and Jobs Act of 2017. The tax penalty was reduced to zero after the end of 2018. People without insurance are no longer assessed a federal individual mandate penalty. There are still employer mandates under the ACA’s Employer Shared Responsibility Provision. (See section 5, below.)

Effective in 2020, the California state health insurance individual mandate requires all residents, with some exceptions, to obtain Minimum Essential Coverage (MEC).

A penalty applies if a resident does not have coverage for a minimum of nine months during each calendar year.

The state mandate does not affect employers; it applies to residents.

2. Pay or Play – Or Get an Exemption

Under the California Minimum Essential Coverage Individual Mandate, all state residents must either:

• Have qualifying health insurance coverage;
• Obtain an exemption from the coverage requirement; or
• Pay a penalty when filing their state income tax return.

Penalties are due to the State of California Franchise Tax Board with annual tax returns. They apply for each month residents are without health insurance.

Residents out of compliance with the requirement are subject to one of two penalties, whichever is highest:

• a flat penalty per household member, or
• 2.5% of gross household income (above the state filing threshold).

In 2022, penalties were at least $800 per adult and $400 for each dependent child under age 18 in the household. A family of four without insurance for a full year faces a penalty of at least $2,400.

Amounts due in 2023 (for 2022 taxes) are not yet known, although they are expected to be greater.

Health insurance providers not reporting coverage information to the Franchise Tax Board by March 31 are subject to a $50 penalty per individual.

3. Qualifying Coverage and Exemptions

To avoid a penalty, California residents need Minimum Essential Coverage for each month of the year, including:

• Personal qualifying health coverage
• Qualifying coverage for a spouse or domestic partner, if applicable
• Qualifying coverage for dependents, if any

Residents can satisfy the requirement in a variety of ways, including having qualifying health insurance coverage:

• Provided through an employer-sponsored plan
• Purchased through the Covered California public exchange or directly from an insurer
• Through Medicare (Parts A and C)
• Through Medi-Cal (California Medicaid plans)

Any insurance plan that meets ACA requirements complies with California’s MEC mandate. Additional information is available on the California Department of Managed Health Care website.

4. How to Avoid Individual Penalties

California residents can also avoid an individual mandate penalty if they have income below the state’s filing threshold or they are:

• Uninsured for three consecutive months or less during the year
• Incarcerated
• Native American
• In the U.S. illegally
• Members of a health care sharing ministry

Residents are also exempt if coverage is considered unaffordable and exceeds the income guideline applicable for the tax year.

Hardship exemptions are also available to those facing personal or family difficulties. That includes homelessness, domestic violence, bankruptcy, eviction, or consequences related to a natural disaster (e.g., a wildfire, earthquake, etc.). More information about exemptions is available on the Franchise Tax Board website.

5. State Individual Mandate Vs. Federal Employer Mandate

The California Individual Mandate does not affect the federal employer mandate. The requirement that employers with 50 or more full-time or full-time equivalent employees offer affordable, minimum value health insurance to full-time employees and eligible dependents still apply. The penalty amount due depends on whether coverage is offered, affordable, and available to all who are eligible.

The federal employer mandate penalties are payable by employers.

The state mandate penalties are payable by individuals (not their employers).

How to Learn More

If you want to offer health insurance and other benefits to your employees, a great place to start is by talking with a broker. A consultation is free and could end up saving you money in the long run. If you don’t already have a broker, you can search for one online.

Job candidates in today’s competitive talent marketplace are looking for more. You know that from reporting on the “great resignation” during the past year. According to a MetLife survey, employees consider health insurance a “must have” benefit. They rank Dental and Vision in their top five priorities, too. Dental is a must-have or nice-to-have by 96% of employees, while Vision is viewed similarly by 94%.

That is a challenge for employers. You want to offer comprehensive benefits, but you also want to control costs for your business. CaliforniaChoice can help.

CaliforniaChoice – the multi-carrier, employee-choice private health exchange – began in 1996. It is uniquely qualified to meet and exceed your employee benefits needs. It offers you and your employees more choices than other single program in the state.

Health Insurance Plans, Dental, and Vision Benefits

CaliforniaChoice delivers everything you and your employees want in a benefits program, including:

• Eight health plans and dozens of HMO, PPO, EPO, and HSA-qualified coverage options
• Greater access to doctors, specialists, and hospitals
• Increased cost control – you choose what amount to contribute to employees’ coverage
• Dental, Vision, Chiropractic, and Life benefits
• Valued-added extras through the Business Solutions Suite and Member Value Suite

Diverse Health Choices: Choose the health insurance coverage that bests meets your individual or family health care needs. You might prefer a PPO from Anthem Blue Cross because you have access to a particular doctor or hospital in the Anthem network. One employee might prefer a local or regional HMO. You can select Sutter Health Plus, Western Health Advantage, or Sharp Health Plan. Another employee might want an HSA-compatible plan from UnitedHealthcare. A fourth might want a centralized health care system like Kaiser Permanente. With CaliforniaChoice, you and they each can have what they want. Or, you can choose options from Cigna + Oscar or Health Net.

Greater Provider Access: We offer full and limited networks, plus access to options in all four Affordable Care Act metal tiers. With multiple tiers, you can offer your employees the maximum number of health care providers.

Defined Contribution: Controlling costs is easy with CaliforniaChoice. Choose a Fixed Percentage (50% to 100% of a specific plan and/or benefits, or contribute a Fixed Dollar Amount for each employee. If an employee selects coverage that costs more than you’re contributing, the employee simply pays the difference. At renewal, you can even adjust your contribution, up or down, giving you complete control over what you’re spending on employee benefits.

Dental, Vision, and More: CaliforniaChoice offers you three great ways to offer Dental to your employees. The Dentegra® Smile Club is included at no added cost through our Member Value Suite. It features reduced fees for dental care services through a network of more than 20,000 providers.

There are Dental HMO options from SmileSaver and PPO options from Ameritas available, too. These are available as employer-sponsored or voluntary. Plus, there’s no minimum participation for voluntary plans.

Ameritas plans include Dental Rewards® if employees use only part of their annual maximum benefit during a plan year. Members can earn additional money toward their next year’s plan maximum. The Carry Over Amount on three plans is $250. The PPO Bonus is up to $150. Other Extras from Ameritas include LASIK and Hearing Care coverage.

Three Vision options are available, including one at no additional cost. The Vision One Eyecare Discount Program offers CaliforniaChoice members discounts on frames, lenses, and eye exams. You can visit America’s Best, EyeMart Express, Target Optical, LensCrafters, and participating Pearle Vision locations.

Two voluntary Vision programs are available – one through EyeMed (Ameritas) and a second through VSP. Both offer eye exams, discounts on frames and lenses, and contacts. You have access to a large network of doctors.

You and your employees can also take advantage of Chiropractic Care. Or, Chiro and Acupuncture. The monthly premium is low and there are affordable member copays.

It’s Easy to Learn More

With CaliforniaChoice, you can get more without spending more. Talk with your employee benefits broker about a custom quote for your business. If you don’t already have a broker, you can search for one on the MyCalChoice website.

The idea of offering multiple insurers through a single program was revolutionary in 1996. Nearly three decades later, CaliforniaChoice still stands apart for providing a different approach to health care. Our program offers you and your employees access to eight premier health plans — a portfolio that is the most diverse in the state.

Beyond that, CaliforniaChoice includes plans in all four Affordable Care Act (ACA) tiers. Each tier offers a different percentage of shared health care costs for you and your employees.

CaliforniaChoice offers Dental, Vision, Chiropractic & Acupuncture, and Life benefits, too. And, as a member of CaliforniaChoice, you get value-added extras like a Premium Only Plan, online HR support, Cal-COBRA or COBRA billing services, employee discounts on travel, entertainment, and other services, plus tools to compare plans, look up providers, and more.

Networks and Hospitals by Region 

Los Angeles and Ventura Counties

You and your employees have access to some of the nation’s leading health care providers, including:

• Adventist Health Glendale
• Cedars-Sinai Medical Center (Los Angeles)
• Community Memorial Hospital (Ventura)
• Huntington Health (Pasadena)
• Kaiser Permanente Los Angeles Medical Center
• Keck School of Medicine of USC (Los Angeles)
• PIH Health Hospitals in Downey and Whittier
• Providence Little Company of Mary Medical Center (Torrance)
• Providence Saint John’s Health Center (Santa Monica)
• Ronald Reagan UCLA Medical Center
• UCLA Santa Monica Medical Center
• Valley Presbyterian Hospital (Van Nuys)
• Ventura County Medical Center

For more information about health plans participating in CaliforniaChoice that offer coverage in Los Angeles County, visit the regional page on our website.

Orange County

You and your employees have access to leading Orange County health care providers and hospitals, including:

• Anaheim Memorial Medical Center
• Hoag Hospital Newport Beach
• Kaiser Permanente Anaheim Medical Center
• Kaiser Permanente Orange County – Irvine Medical Center
• MemorialCare Orange Coast Medical Center (Fountain Valley)
• MemorialCare Saddleback Medical Center (Laguna Hills)
• Providence St. Jude Medical Center
• St. Joseph Hospital of Orange
• UC Irvine Medical Center

For more information about health plans participating in CaliforniaChoice that offer coverage in Orange County, visit the regional page on our website.

Northern California

Whether in the Bay Area, San Jose, Sacramento, or outlying NorCal communities, you have great choices:

• Canopy Health
• Dignity Health (Saint Francis Memorial Hospital; St. Mary’s Medical Center; Mercy Medical Center in Mt. Shasta and Redding; and others)
• El Camino Health
• Good Samaritan Hospital (Bakersfield and San Jose)
• John Muir Medical Center (Concord and Walnut Creek)
• NorthBay Medical Center and NorthBay VacaValley Hospital
• O’Connor Hospital
• Stanford Hospital
• Sutter Health (multiple facilities and cities)
• UC Davis Medical Center
• UCSF Medical Center

For more information about health plans participating in CaliforniaChoice that offer coverage in Northern California, visit the regional page on our website.

Central Coast and Inland

You and your fellow CaliforniaChoice members have access to outstanding coastal and inland health providers, including:

• Clovis Community Medical Center
• Community Regional Medical Center (Fresno)
• Fresno Heart & Surgical Hospital
• Kaiser Permanente Fresno Medical Center
• French Hospital Medical Center (San Luis Obispo)
• Goleta Valley Cottage Hospital
• Marian Regional Medical Center (Santa Maria)
• Saint Agnes Medical Center (Fresno)
• Santa Barbara Cottage Hospital
• Sierra Vista Regional Medical Center (San Luis Obispo)

For more information about health plans participating in CaliforniaChoice that offer coverage along the Central Coast of California, visit the regional page on our website.

San Diego

 You have access to premier networks and medical facilities in the San Diego area, including:

• Kaiser Permanente San Diego Medical Center
• Rady Children’s Hospital – San Diego
• Scripps Memorial (multiple facilities)
• Sharp Health (multiple facilities)
• UC San Diego Medical Center

For more information about health plans participating in CaliforniaChoice that offer coverage in San Diego County, visit the regional page on our website.

Inland Empire

You can access leading hospitals and other providers throughout Riverside and San Bernardino counties, including:

• Desert Regional Medical Center (Palm Springs)
• Desert Valley Hospital (Victorville)
• Dignity Health San Bernardino Medical Center
• Eisenhower Medical Center (Rancho Mirage)
• Kaiser Permanente Medical Centers (Fontana, Ontario, Riverside, and San Bernardino)
• Riverside Community Hospital
• St. Mary Medical Center (Apple Valley)
• Loma Linda University Medical Center (multiple facilities)

For more information about health plans participating in CaliforniaChoice that offer coverage in the Inland Empire, visit the regional page on our website.

How to Get a Quote

Talk to a broker to learn more about how CaliforniaChoice can help you offer more while maintaining control over your budget. Your broker can provide additional details about coverage options in your area and deliver a custom quote for your group. If you don’t already have an employee benefits broker, you can search for one here.

Are you looking to attract employees in today’s ultra-competitive talent market? Then it’s important for you to offer more than competitive wages. Employees expect more, including a comprehensive benefits program.

So, where do you start? It’s good to know what’s required in a benefit plan? Group size is one factor. However, when you are comparing plans, group size is not your only consideration. It’s also important to know what employees are looking for when comparing potential new jobs. For example, where does health insurance rank among “must have” benefits?

According to the MetLife 20th Annual U.S. Employee Benefit Trends Study 2022, a comprehensive benefits package is a “must have” for two-thirds (66%) of employees when accepting a new role. The same study found health, dental, vision, life, and disability insurance are five of the top seven priorities for employees.

Employee Benefit Plan Requirements

Affordable Care Act Requirements

There are also certain coverage requirements that, if not followed, could lead to penalties. The Affordable Care Act (ACA) was signed into law by President Barack Obama in 2010. Federal and state health insurance exchanges began in 2013. They offered coverage effective January 1, 2014. That’s when insurance companies became required to provide health insurance to any American adult ages 19 to 64 who applied for ACA-compliant coverage.

To discourage people from waiting to get coverage until they got sick, the ACA required all Americans to buy coverage or face a fine. That ACA individual mandate was rescinded and no longer applied after 2018.

The Employer Shared Responsibility Provision continues to require Applicable Large Employers (ALEs) to provide minimum value coverage to 95% of full-time employees and dependent children. If an ALE does not offer affordable, comprehensive coverage, the employer is subject to penalties.

Compliant health plans must cover 10 categories of care. The complete Essential Health Benefits (EHB) list includes:

• Ambulatory patient services (outpatient care you get without being admitted to a hospital);
• Emergency services;
• Hospitalization (like surgery and overnight stays);
• Pregnancy, maternity, and newborn care (both before and after birth);
• Mental health and substance use disorder services, including behavioral health treatment (including counseling and psychotherapy);
• Prescription drugs;
• Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills);
• Laboratory services;
• Preventive and wellness services and chronic disease management; and
• Pediatric services, including oral and vision care (however, adult dental and vision coverage are not essential health benefits).

Plans must also include birth control and breastfeeding coverage. For more information about requirements under the ACA, visit the HealthCare.gov website or healthinsurance.org website.

Beyond the ACA requirements, there are state-required Essential Health Benefits Benchmark Plans. For information, visit the Centers for Medicare & Medicaid Services (CMS) web page on benchmark plans. The page includes links for California’s required benefits and information for 2017-2023.

ALE Requirements

If your business is an Applicable Large Employer (ALE) as set forth in the ACA, you’re subject to the employer mandate. ALEs are organizations employing a monthly average of 50 or more full-time or full-time equivalent employees (FTEs). Each employer is required to make an annual ALE determination based on the business workforce during the prior year.

If an employer has fewer than 50 FTEs, on average, the business is not an ALE for the current calendar year. If that includes your business, you are not subject to the employer mandate or employer ACA reporting requirements.

In contrast, if you had at least 50 full-time employees, including FTEs, during the prior calendar year, your business is an ALE for the current calendar year.

As noted earlier, the ACA requires minimum health insurance coverage to 95% of full-time employees and dependent children.

If you do not offer coverage, your business is subject to ACA penalties. In 2022, a penalty of $2,750 applies for each of your full-time employees minus the first 30. For example, if you have 150 employees and do not offer health insurance to full-time employees and dependents, your penalty would be $330,000. That’s 120 employees times $2,750.

If coverage is not affordable or does not offer Minimum Value, a different penalty applies. In determining affordability, your employee’s cost cannot exceed 9.61% of income in 2022. Minimum Value means the plan covers at least 60% of the total allowed cost of benefits expected under the plan.

The “B” penalty (under Section 4980H(b) is $343.33 per month ($4,120 annualized) for each full-time employee with subsidized coverage through the marketplace.

If you’re unsure about your ALE status, CaliforniaChoice offers three ACA calculators on its website:

• ACA Full-Time Equivalent Calculator
• ACA Penalties Calculator
• ACA Safe Harbor Calculator

You can also download the Employer Mandate Reporting Guide through the CaliforniaChoice website (using the link above).

California Mandate

Beginning in 2020, California was among six jurisdictions with an individual mandate for health insurance coverage. The mandate does not apply to employers, but rather to residents, who must either:

• Have qualifying health insurance coverage;
• Obtain an exemption from the requirement to have coverage; or
• Pay a penalty when they file their state income tax return.

Penalties are due for each month an individual or family went without health insurance during the tax year. For example, in filing in 2022 for 2021, the penalties are at least $800 per adult and $400 per dependent child under 18 in the household. A family of four without insurance for a full year would face a penalty of at least $2,400.

For additional information on the state health care mandate, including the exemptions, visit the California Franchise Tax Board web page. Again, it’s important to note that penalties are paid by individuals, not employers, when filing state income tax returns.

Beyond What’s Required

CaliforniaChoice makes it easy for you to offer what’s required and deliver more to your employees.

In addition to offering health insurance from eight health plans and a variety of HMO, PPO, EPO, and HSA-compatible choices, you can offer your employees Dental, Vision, and Chiropractic care. Plus, CaliforniaChoice offers value-added extras like a Premium Only Plan, online HR support, and employee discounts on travel, entertainment, and more.

Consult a Broker

Shopping for the right coverage for employees can be overwhelming. An employee benefits broker is a great resource. A broker will help you explore your options to ensure you find the coverage that meets the requirements for your group size and addresses the diverse needs of employees.

If you are not already working with an employee benefits broker, you can search for one here.

If you own or run a small business, you have a lot on your plate. Taking on the added responsibility of shopping for health insurance for employees may seem intimidating. But, it doesn’t have to be if you’re working with the right health insurance partner.

CaliforniaChoice puts you in control by offering everything you and your employees want:

• Eight health plans – and dozens of options – through a single health program
• Cost control with Defined Contribution – you choose the amount you want to put toward your employees’ health care
• Greater access to doctors, specialists, and hospitals
• Options for Dental, Vision, Chiropractic, and Life Insurance
• Consolidated billing – one bill for all coverage (even if employees enroll in multiple health plans)
• Smart Decision Technology: an online plan comparison tool, online enrollment, doctor and hospital search tools, and a prescription drug search

CaliforniaChoice meets the diverse needs of you and your employees at a price you can afford.

The Benefits of Using a Broker

A great place to begin your comparison of health insurance programs for your employees is by talking with an employee benefits broker. At CaliforniaChoice, we work exclusively through brokers, who can counsel you about the options in your area. A broker helps you find the right coverage for your business based on your unique needs and budget.

A broker will also share information about the Metal Tier and provider network options. You can choose from medical plans in all four Affordable Care Act (ACA) Metal Tiers: Bronze, Silver, Gold, and Platinum.

ACA Metal Tiers

Each tier offers a different percentage of shared health care costs for the employee. They range from 10% to 40%. The health plan pays the other 90% to 60% of covered costs when patients visit an in-network provider.

You can offer your employees access to one, two, three, or all four metal tiers. With Defined Contribution through CaliforniaChoice, your costs could even remain the same.

Each employees receives a personalized enrollment worksheet that spells out their options, your contribution amount, and how it reduces the cost of coverage. It also shows how much they will have to pay if they select a plan that costs more than your contribution.

Coverage Considerations

If you are not required to offer health insurance, it’s up to you whether you want employee-only coverage or employee and dependent coverage. If you are not sure if you’re an Applicable Large Employer, visit the CaliforniaChoice website. It has ACA Calculators to determine your group size.

You may want to make health insurance available to your full-time employees and dependents anyway. Employee benefits can help you attract and retain workers in today’s competitive market – and boost employee satisfaction, too. Read our post, 11 Reasons Why You Should Offer Group Health to Employees, which we published earlier this year for details.

Plan Options

Here’s a look at plan options and how they differ:

• HMO (Health Maintenance Organization) plans: Each insured must choose a Primary Care Physician (PCP) to manage their care. Patients are required to get approval from the PCP to visit a specialist. Treatment is generally not available outside of the HMO network, except in case of an emergency.
• PPO (Preferred Provider Organization) plans: A PPO offers more flexibility, although at a higher premium than an HMO or EPO. A patient can go directly to an in-network doctor, specialist, or hospital without a referral. In-network care is offered at pre-negotiated, discount rates. PPO members can go outside of the PPO network, although they will pay higher out-of-pocket costs.
• EPO (Exclusive Provider Organization) plans: An EPO is often described as a sort of a hybrid plan that offers both HMO and PPO benefits. Like an HMO, patients need to get health care through a doctor, specialist, or hospital that is part of the EPO network. Like with a PPO, members are able to go to a specialist without a referral, as long as the provider is in-network.

A High Deductible Health Plan (HDHP), which can be an HMO, EPO, or PPO, may offer a lower monthly premium. But, the insured has to pay more health care costs upfront before an HDHP begins to pay its share. Combined with a Health Savings Account (HSA), insured persons can pay for qualified medical expenses with funds free of federal taxes.

A Program with No-cost Extras

CaliforniaChoice doesn’t just offer you and your employees outstanding health insurance options. You also get value-added benefits at no extra charge through two exclusive programs.

The Business Solutions Suite saves you money and delivers valuable benefits for your business:

• Online HR support from Mineral: Get best practices, customizable handbooks, job descriptions, and more
• Premium Only Plan (POP): Reduce your payroll taxes and give employees the ability to pay insurance premiums with pre-tax dollars
• Flexible Spending Account (FSA): Employees can put away money to pay for eligible out-of-pocket health care (Available to groups of 15 or more employees)
• COBRA or Cal-COBRA Billing: Take advantage of participant invoicing, premium collection and remittance, payment tracking, and processing of eligibility changes for non-payment

The Member Value Suite offers CaliforniaChoice members outstanding savings, including:

• Discounts of up to 57% on Garmin, Vitamix, and Fitbit products
• Fitness memberships at just $25 per month
• Reduced fees on hundreds of Dental procedures at participating Dentegra® Smile Club dentists
• Discounts on frames, lenses, and eye exams at locations from coast to coast
• Up to 50% savings on brand-name hearing aids – plus discounts on testing, batteries, and more
• Rx savings on brand-name and generic prescription drugs – you can even reduce your cost to less than your co-pay with insurance
• Discounts on shopping, home services, education, travel, entertainment, and more

Taking the Next Step

If you’re ready to learn more, ask your broker about everything available through CaliforniaChoice. You can request a custom quote for the options in your area. If you do not have a broker, search for one here.

Making changes to your health insurance coverage isn’t limited to your annual open enrollment. If you experience what the Affordable Care Act (ACA) calls a “life event,” you and your employees can also make changes to your coverage.

What Is a Life Event?

There are several different “triggers” that could make your employees eligible to change their coverage, including:

• Marriage or domestic partnership: A change in an employee’s marital status (e.g., divorce or separation) or domestic partnership.
• New family member: Adding a dependent child through adoption or birth.
• Late enrollment or involuntary loss of coverage: If an employee previously waived coverage (and did not enroll when first eligible because of other coverage), he/she/they can enroll late and/or change benefits if that other coverage ends due to death of the spouse (who maintained it) or loss of eligibility for benefits due to reduced work hours or job loss.
• Remove coverage or dependents: A covered employee can remove existing insurance or dependents from his/her/their CaliforniaChoice coverage. For example, when a dependent child reaches age 26.
• Moving: If an employee moves to a new place of residence (and out of the existing health plan’s service area), that qualifies, too.

When Can I Make Changes to my Group Health Plan?

Making Coverage Changes

Employees have a limited window – 60 days from a qualifying/triggering event – to make changes.

At CaliforniaChoice, we want to make these changes easy for members. If an employee wants to add coverage for a newborn or newly adopted child or remove a dependent from coverage, they simply take the following steps:

• Visit calchoice.com, click on “Life Events” and then “New Family Member” or “Remove Coverage or Dependents” to submit a Change Request online.
• Download, complete, and submit a Change Request Form, along with proof of adoption or a newborn) to the group contact. Or, send it via email to the CaliforniaChoice Customer Services team.

Effective Date of Changes

Changes requested will be effective on the first day of the month following receipt of a completed request. For example, if an employee submits a request/application on May 10, the change would be effective on the first of June. (If the employee submits a request through you, it’s important you forward it to CaliforniaChoice as soon as possible, so as not to delay the effective date.)

If new ID Cards are issued in connection with the request, they will be sent within 7-10 business days after the processing is complete.

Help When You or Your Employees Need It

While there are many actions you and your employees can take online concerning your bill, account changes, coverage, and benefits, the CaliforniaChoice team is available to offer support by email or phone. Our Customer Service team is available Monday through Friday, 8:00 a.m. to 5:00 p.m., Pacific Time.

Today’s workforce is vastly different from environments of the past. It’s more diverse than ever before, which means broader perspectives, increasingly varied opinions, and more inclusion of previously underrepresented groups.

Bringing a diverse group of people together has a wealth of benefits, but it can pose challenges for business owners trying to meet a variety of employee needs, especially when it comes to health care.

The Expectations of Today’s Employee

The challenge for employers is offering an employee benefits program that can address the needs of a varied group. The 20^th Annual MetLife Employee Benefits Trends Study released this year finds workers today expect their employers to recognize the importance of their lives – on the job and away from work.

As MetLife notes, “Forward-thinking HR leaders are looking at benefits and beyond to adopt a more holistic view of employee needs.” That’s because it is what’s needed to serve today’s broad employee population.

Changing “Must-Haves”

The pandemic of the past two years has prompted employees to rethink their priorities, and reconsider their “must have” benefits when it comes to making a job change. Here’s a comparison of views pre-pandemic (in 2020) and today (in 2022).

The priorities of employees when it comes to benefits stayed the same from 2021 to 2022, but are a bit different from 2019. The top insurance-related “must have” or “nice to have” benefits during this period are as follows, according to MetLife’s studies in the three-year period:

2019

• Health Insurance
• Prescription Drug
• Dental Insurance
• Vision Insurance or Discount Program
• Life Insurance
• Disability Insurance
• Accident Insurance
• AD&D Insurance
• Critical Illness

2021 and 2022

• Health Insurance
• Dental Insurance
• Vision Insurance or Discount Program
• Life Insurance
• Disability Insurance
• Critical Illness
• Accident Insurance
• Hospital Indemnity
• Cancer Insurance

An enduring trend – year after year — is that Health Insurance is among the most desired employee benefits. And, thanks to the Affordable Care Act (ACA), Health Insurance coverage offered through ACA-compliant plans offers a comprehensive range of care.

What Is Group Health Insurance?

Group Health Insurance most often refers to an employer-sponsored, Affordable Care Act (ACA) compliant health insurance plan that provides benefits for employees’ and dependents’ care. To qualify as ACA compliant, plans have to include 10 Essential Health Benefits (EHBs), including:

• Ambulatory patient services (outpatient care you get without being admitted to a hospital)
• Emergency services
• Hospitalization (like surgery and overnight stays)
• Pregnancy, maternity, and newborn care (both before and after birth)
• Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
• Prescription drugs
• Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)

Plans must also include birth control coverage and breastfeeding coverage.

More information is available at the healthinsurance.org website, and at the HealthCare.gov website.

Frequently Asked Questions

Often employers have questions about Group Health Insurance, and we’ve answered some of the most frequently asked questions below.

• How can I be sure I am getting the best deal on health insurance for my business and my employees?
  • One of the best ways to ensure you’re getting the most for your employee benefits dollars is to engage an employee benefits broker to help you shop and compare the marketplace. Your broker will be able to provide you with quotes for multiple plan types from different insurers and/or available exchange programs.
• How can I be sure the plan or plans I am considering include the doctors and hospitals my employees and I want?
  • If CaliforniaChoice is among the options you’re considering, there’s a valuable Plan Comparison Tool online. You can easily compare plans based on monthly premium, health plan, metal tier, plan type, or preferred doctors. 
• Once coverage begins, is it easy for employees to make changes? If, for example, they move, get married or divorced, adopt a child, or have a baby.
  • Absolutely. Many “life event” changes can be made at calchoice.com or by submitting paperwork through the website.
• If an employee has a pre-existing health condition, is he/she/they still able to apply for and get Health Insurance coverage?
  • Under the ACA, health insurers can no longer refuse coverage or charge an applicant more because of a pre-existing health condition. If you’re buying an ACA-compliant Group Health plan for your small business, all of your employees should be able to get coverage.
• If I have a new hire or an employee termination, is it easy for me to make changes?
  • It’s very easy to make changes online whenever your staff changes. Just login at calchoice.com, select Manage My Account and request a new hire quote or employee coverage termination. You can also get help through Customer Service.
• If an employee is enrolled in an HMO, can he/she/they change doctors?
  • If you or your employees are enrolled in an HMO (or an EPO [Exclusive Provider Organization]) plan, you are usually required to select a Primary Care Physician (PCP) to help guide your care. Most plans allow you to change your PCP whenever you wish, although there may be frequency limits. For example, you may be able to change only one per month.
• If I am enrolled in an HMO, can I switch to a PPO?
  • Unless you move out of your health plan’s coverage area, or you experience a qualifying life event, you are usually locked-in to your health plan until your next enrollment period. At that time, you can change plans or move from an HMO to another plan type.

Coverage and Eligibility

The employer mandate in the ACA requires Applicable Large Employers (ALEs) to offer Minimum Essential Coverage (MEC) to full-time employees and eligible dependents. An ALE is a business with at least 50 full-time employees, including full-time equivalent employees, on average during the prior calendar year.

If your business is an ALE, and you fail to offer your eligible employees “affordable” coverage that provides minimum value to 95% of your full-time employees and their children (up to the end of eligibility when they turn age 26), you are subject to ACA penalties.

If you are not subject to the employer mandate, you can choose to cover full-time employees only, full-time employees and eligible dependents, or full-time and part-time employees (with or without dependents). Depending on your selected carrier and plan, there may be eligibility guidelines for participants. Ask your broker for details.

Selecting Your Contribution Amount

If you select coverage from the CaliforniaChoice multi-carrier, private exchange, you decide what you want to contribute to your employees’ health insurance costs. It’s called Defined Contribution. You can select a Fixed Percentage (50% to 100%) of a specific plan and/or benefit. Or, you can choose a Fixed Dollar Amount for each employee. (The amount has to be the same for all employees.)

Your employees then apply your generous contribution to whichever health plan and benefits they prefer. If an employee selects a plan that costs more than your contribution, he or she simply pays the difference.

When you renew your CaliforniaChoice coverage, you have the option to adjust your contribution – up or down – giving you complete control over what you spend on employee benefits.

Finding the Right Coverage

If you’re shopping for Group Health Insurance for your employees, what can you do to offer more to your employees? How can you give them the ability to personalize their benefits? Depending on the options available from your broker, you might be able to package together a program involving multiple insurers and benefits administrators. Or, you might consider the multi-carrier CaliforniaChoice exchange.

Your employees can choose from eight different health plans: Anthem Blue Cross, Cigna + Oscar, Kaiser Permanente, Health Net, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage.

There are plans available at different price points, too. Health Maintenance Organization (HMO) plans are generally the least expensive, followed by Exclusive Provider Organization (EPO) plans and Preferred Provider Organization (PPO) plans. There are multiple Health Savings Account (HSA) qualified plans among the offerings.

CaliforniaChoice also offers added benefits like Dental, Vision, Chiropractic (with or without Acupuncture), and Life Insurance. Plus, you and your employees have access to fitness and wellness products and services, discounts through the Cal Perks program, and more.

Greater Access to Doctors

One of the reasons so many small businesses in California prefer CaliforniaChoice is that it offers a choice of full and limited provider networks. That gives you and your employees access to more doctors, specialists, and hospitals than any single health plan in California.

You can offer plans in a single Affordable Care Act (ACA) metal tier, multiple tiers, or all four ACA tiers (Bronze, Silver, Gold, or Platinum). Each tier offers a different percentage of shared health costs for employees. They range from 10% to 40% (with the health plan paying the other 90% to 60%). This can significantly increase the number of plans, doctors, and specialists available to your employees.

Talk With a Broker

To get more information – or a custom quote for your group – talk with an employee benefits broker. Your broker can share details about the plans in your area, as well as options to help you address the diverse needs of your employees. If you don’t already have an employee benefits broker, you can search for one here.

According to a 2020 survey by the International Foundation of Employee Benefit Plans, a majority of employers (87%) offered at least one voluntary, supplemental insurance product to their workers that year. This was up two percent from 2018. Among smaller organizations, the percentage was slightly lower, 76%, while nearly all (96%) of employers with 500 or more employees offered at least one voluntary benefit.

What Is Supplemental Insurance?

The recent pandemic has increased interest in supplemental and voluntary benefits. This includes products beyond employees’ traditional Major Medical insurance coverage. Dental, Vision, Life, and supplemental health insurance (i.e., Hospital Indemnity, Accident, and Critical Illness) fit in this group.

According to a 2022 report by Aon, the availability of these benefits through employers increased 41% between 2021 and 2022.

In a competitive talent market, offering the right combination of benefits to your employees can help you differentiate your business. It can help you attract new employees and retain your top performers.

Preferred Employee Benefits

So, what are employees’ most-preferred benefits? As you might expect, health insurance is the most popular. Eighty-five percent of employees say health insurance is a “must have.” Another 10% say it’s a “nice to have” benefit. Only four percent of employees responding in the MetLife 19^th Annual U.S. Employee Benefit Trends Study say health insurance is not needed.

In a different survey by WTW (formerly Willis Towers Watson), 46% of workers said they would forego added pay for a more generous health plan. That figure is up from 36% just two years ago, according to an article published by the Society for Human Resource Management (SHRM).

As far as supplemental and voluntary benefits go, according to MetLife, the most-popular products include:

• Dental Insurance – viewed as a “must have” by 71% of employees and a “nice to have” by another 25% of employees
• Vision Insurance – considered a must have by 70% of employees and a nice to have by another 25% of employees
• Life Insurance – viewed a must have by 61% of employees and a nice to have by another 30% of employees
• Disability Insurance – considered a must-have or a nice to have benefit by 90% of employees
• Critical Illness – viewed by 44% of employees as a must have and a nice to have by another 43%
• Accident Insurance – viewed favorably by 87% (42% as a must-have and 45% as a nice-to-have benefit; 13% said it is not needed
• Hospital Indemnity – considered a must-have benefit by 38% and a nice to have benefit by 45%
• Cancer Insurance – viewed as a must-have benefit by more than one-third (35%) and a nice-to-have benefit by nearly half (47%)

Looking at participation rates, Aon reports significant jumps in employee participation in the past two years. Critical Illness was up 11% in 2022, while Accident Insurance was up 10%. Hospital Indemnity was up 6%. Permanent Life was up five percent. Short Term Disability was down slightly.

How Do Supplemental Insurance Plans Work?

As the name suggests, supplemental health plans are designed to complement employees’ primary coverage like Major Medical. Some plans offer specific payments related to treatment following an accident. Other plans offer direct payments to the insured to help offset costs related to a hospital stay or specific condition diagnosis. Benefits are payable in addition to those paid by a health plan.

Where to Find Coverage

Many health insurers and health plans writing Group Health Insurance coverage in California also offer supplemental and voluntary coverage. Among others are these:

• Aetna
• Anthem Blue Cross
• Blue Shield of California
• CaliforniaChoice (the multi-carrier private exchange)
• Cigna/Cigna + Oscar
• Health Net
• Kaiser Permanente
• MediExcel Health Plan (cross-border coverage)
• Sharp Health Plan
• Sutter Health Plus
• UnitedHealthcare
• Western Health Advantage

Other carriers and administrators are singularly focused, such as Delta Dental, LIBERTY Dental, and VSP® (formerly Vision Service Plan). The ChoiceBuilder ancillary benefits exchange offers Dental, Vision, Life, and Chiropractic Care (or Chiro and Acupuncture). Ameritas offers both Dental and Vision in California. MetLife offers a range of ancillary coverage, including Dental, Life, Vision, and Disability.

What are the Advantages of Offering Supplemental Health

Employers often choose to make voluntary and supplemental products available to employees so they can tailor coverage to their specific needs. It gives employees the ability to ensure they are protected against costs they would otherwise have to pay out of pocket, including deductibles, copays, and coinsurance. Again, offering voluntary and supplemental benefits can also help you set yourself apart from other businesses in employee recruitment.  

How to Learn More

If you’re ready to learn more about available supplemental options, a great place to start is to talk with your employee benefits broker. A broker will be able to discuss employer-sponsored and voluntary coverage available in your area.

If you do not already have a broker, you can search for one here.

There are many reasons to choose CaliforniaChoice for your small business. The program includes eight premier health plans and gives your employees the freedom to choose the one that’s right for them. You have the power to control your costs through Defined Contribution. Beyond that, CaliforniaChoice offers the greatest access to doctors, specialists, and hospitals in the state.

Did you know CaliforniaChoice isn’t just an ideal health care solution for your business? It also provides access to other benefits, like Dental, Vision, Chiropractic, and Life Insurance.

Group Dental Coverage

With CaliforniaChoice, you can choose from a discounted Dental service program, two Dental HMOs, and four Dental PPOs. Dentegra® Smile Club is included at no additional cost. It’s one of the many value-added benefits in the CaliforniaChoice Member Value Suite.

Members can also take advantage of reduced fees on hundreds of dental procedures. Plus, they can access a network with thousands of participating dentists in California.

Perhaps best of all, there are no claim forms or other paperwork. There are no waiting periods. Your employees can enjoy immediate savings after joining the program.

Two low-cost SmileSaver^SM plans are available: Dental 3000 HMO and Dental 1000 HMO. These plans offer free office visits, oral exams, X-rays, and two cleanings per year. Oral surgery, restorative, endodontics, periodontics, crowns, and prosthodontics are available with co-pays. Orthodontics is available, too.

Either plan can be added as a voluntary option with no minimum employee participation. Members are required to live in the participating dentist’s service area. You can view the SmileSaver Online Provider Directory through a link at CalChoice.com or by visiting the MetLife website.

Four Ameritas® PPO plans are available: PPO 3000, PPO 3500, PPO 4000, and PPPO 5000. A range of different in- and out-of-network annual maximums and deductibles is available.

All four Dental PPO plans include core services. That includes Preventive, Basic, Major, and Endo/Perio benefits. Different benefit levels apply for in- and out-of-network services.

A Waiting Period applies to Major Services for groups of 10 or fewer employees. It also applies to those without 12 months of uninterrupted Dental coverage under a prior plan. A 24-month Waiting Period applies for Orthodontia under the Ameritas PPO 3500, 4000, and 5000 plans. (Ortho is not part of PPO 3000.)

Besides outstanding Dental benefits, PPO 3500, PPO 4000, and PPO 5000 enrollees get access to Dental Rewards® by Ameritas. Members who visit a dentist and use only a portion of their annual maximum benefit in a year are rewarded with additional benefits the following year.

Ameritas PPO coverage is also available as Voluntary, with the full premium paid by employees. For complete plan information, view the Ameritas PDF summary at CalChoice.com.

Dental Health Benefits Matter to Employees

A comprehensive employee benefits package can help you set your business apart. That’s especially important in today’s competitive talent market. To learn more about your options from CaliforniaChoice, talk with your broker. If you don’t already have a broker, we can help you search for one.

Contrary to what you might expect, using a broker won’t cost you more. It could save you and your business money. That’s because a broker will help you find coverage your employees will appreciate, while helping you stay within your budget.

If you’re shopping for Group Health Insurance for your employees, you’re likely wondering what you can expect to spend. You’re not alone and the answer isn’t a simple one. That’s why we’re taking a closer look at the cost of Group Health Insurance and the factors that influence it.

Your Group Health Insurance Cost Depends On:

• Your group size: Are you a Small Group or a Large Group? In California, “Small Group” applies to any employer-sponsored plan for groups with up to 100 employees. Large Groups in California have 101 or more employees. If your group is small, you’ll pay “table rates” for your employees based on their ages. If your group is large, your rates are negotiable and are based on your group’s claims experience as well as demographics.

• Your coverage preference: The plan (or plans) you select for your employees are available at different price points. HMO (Health Maintenance Organization) plans are generally the least expensive. PPO (Preferred Provider Organization) plans offer increased flexibility, which can come with additional costs. The lesser know EPO (Exclusive Provider Organization) plans are a hybrid model that combines the best of both worlds – increased flexibility without high-cost premiums. Added benefits, such as Dental or Vision, affect costs, too.

Some plans – like the CaliforniaChoice private multi-carrier, employee-choice exchange – offer added benefits like Dental, Vision, Chiropractic (with or without Acupuncture), and Life Insurance. Other benefits, such as discounted services, fitness and wellness, and more may be available at no added cost.

• Ages of employees: Health insurers still consider the age of each participant (employees and dependents). The employer’s ZIP Code also drives the cost, even if employees live in other ZIP Codes.

• Your contribution: With CaliforniaChoice, you decide how much you want to put toward your employees’ premiums. You can choose a Fixed Percentage (50% to 100%) of a specific plan or a Fixed Dollar Amount for each employee. (The amount has to be the same for all employees.)

• Network and Metal Tier choices: Other factors affecting costs are your choice of provider network and the ACA Metal Tier for your plan(s). You can choose from full and limited networks. That determines employees’ access to doctors, specialists, and hospitals. Four metal tiers are available in the employer-sponsored marketplace. They are Bronze, Silver, Gold, and Platinum. Each aligns with the benefits offered by plans in that tier, according to its actuarial value, which is the percentage of total costs for covered benefits.

The higher the metal tier, the higher the percentage paid by the plan for in-network-covered services. For example, a Bronze plan pays 60% for in-network covered services, with the employee paying the remaining 40%. A Silver plan pays 70%, with covered insureds paying 30%. A Gold plan pays 80% for in-network covered services, with insureds paying 20%. A Platinum plan pays 90% toward covered services, in-network, while the insured pays 10%. Depending on your plan and carrier selection, you may be able to offer employees a single ACA tier, multiple tiers, or all four tiers.

“De-Minimis” variations: Federal law allows states to broaden or reduce the federal ACA standard for actuarial values within metal tiers. While changed several times over the years, current law allows states to enhance or reduce a plan’s actuarial value within each metal tier by -4/+2%.  For example, this means a Gold plan could have a 76% to 82% actuarial value instead of the standard 80%. Each plan varies. 

Average Group Health Insurance Costs

According to the Kaiser Family Foundation (KFF) 2021 Employer Health Benefits Survey, nationally the average annual premium was:

• $7,739 for Single coverage and $22,221 for Family coverage.
• For Single coverage, the employer’s contribution was 83% of the total cost ($6,440), versus 72% ($16.253) for Family coverage.
• Premiums at small and large firms were comparable in 2021. They were $7,813 at small firms as compared to $7,709 at large firms for Single coverage.
• The numbers were $21,804 versus $22,389 at large groups for Family coverage.

Workers at small firms, on average, contribute a larger percentage for Family coverage than those at bigger firms, 24% as compared to 37%.

As you might expect, premiums for an HDHP (High Deductible Health Plan) with a savings option were the lowest. PPO premiums were on the higher side.

Nearly a third (29%) of covered employees at smaller firms enjoy the benefit of their employers paying the entire premium for Single coverage. That contrasts with just five percent of employees at larger firms.

For those employees with Family coverage, nearly one-third (31%) at small firms must contribute more than half of their Family coverage premium. That compares to just five percent of covered employees at large firms.

Based on plan type, the average employee and employer contributions for Single and Family coverage for 2021 were as follows:

KFF found PPOs attracted nearly half (46%) of insured employees in 2021. More than one-quarter (28%) enrolled in HDHPs with a saving option. Sixteen percent chose an HMO, nine percent enrolled in a Point of Service (POS) plan, and one percent chose an indemnity plan. This breakdown is similar to 2020 enrollments.

Self-Funded and Level-Funded Plans

Many firms, especially larger firms, choose to self-fund employee health coverage. KFF found nearly two-thirds (64%) of workers enrolled in self-funded plans. That includes 21% of covered employees at small firms and 82% covered at larger firms. Again, these numbers are similar to 2020.

Deductibles and Cost-Sharing

Eighty-five percent of covered workers have an annual deductible that must be paid before many services are covered under their health plan. The average deductible is $1,669 for Single coverage (across all plan types), with some variance for group size. At small firms, the average is $2,379 as compared to $1,397 at larger firms. The average Single plan deductible was up 13% in 2021, when compared to the prior five years – and up 68% over the last 10 years.

Copays also apply for most covered workers. These are due when visiting a doctor, being admitted to the hospital, or having outpatient surgery. Average copayments in 2021 were $25 for primary care and $42 for specialty care. The coinsurance amount for primary care was 19%, 20% for specialty care.

Coverage Availability

Nearly two-thirds (59%) of employers offered benefits in 2021 to at least some workers, although it varied by firm size. Among those with three to nine workers, less than half (49%) offered health coverage. In contrast, virtually all employers with 1,000 or more workers offer health coverage to at least some workers. KFF says that among employers that offered health coverage in 2021, 77% of employees choose to enroll.

Find Coverage for Your Group

If you’re interested in comparing options for your employees, the best place to start is with a broker. Your broker can discuss the plans and coverage options available in your area. If you don’t already have an employee benefits broker, you can get a quote from one of our CalChoice preferred brokers today.