The Centers for Disease Control and Prevention (CDC) routinely reminds Americans – through print, radio, television, and other means – that vaccines can greatly reduce or eliminate the risk of infectious diseases.
Beyond the COVID-19 vaccine, which has been spotlighted for the past 15 months, pharmaceutical companies promote other vaccines on a regular basis. Among them are Hepatitis, Human Papillomavirus, Influenza, and Shingles.
As part of the Affordable Care Act (ACA), all ACA-compliant plans must include coverage for certain vaccines without a copayment or coinsurance when provided by an in-network health care provider. This is even true for patients who have not yet met their annual plan deductible.
What Vaccines Does Health Insurance Cover?
While dosage and availability vary by patient age and health conditions, most health plans include insurance coverage for the following vaccinations:
- Hepatitis A
- Hepatitis B
- Herpes Zoster (Shingles)
- Human Papillomavirus (HPV)
- Influenza (Flu)
- Measles, Mumps, and Rubella (MMR)
- Meningococcal (MenB)
- Pertussis (Whooping Cough)
- Tetanus (Lockjaw)
- Varicella (Chickenpox)
The top 10 causes of death in the United States – all exceeding 50,000 lives – are due to the following health conditions:
- Heart disease (nearly 700,000 annually)
- Cancer (602,000+)
- COVID-19 (350,000+)
- Accidents/unintentional injuries (200,000+)
- Stroke/cerebrovascular diseases 160,000+)
- Chronic lower respiratory disease (150,000+)
- Alzheimer’s disease 134,000+)
- Diabetes (102,000+)
- Influenza and Pneumonia (50,000+)
- Nephritis, Nephrotic Syndrome, and Nephrosis (52,500+)
Health plans participating in the CaliforniaChoice private health insurance exchange offer vaccines through physicians’ offices as well as participating retail pharmacies. For more vaccine information, refer to these web pages:
Anthem Blue Cross
Cigna + Oscar
Sharp Health Plan
Sutter Health Plus
Western Health Advantage
To learn more about preventive care services and other benefits and services offered to members through CaliforniaChoice, talk with your employee benefits broker. If you do not already have a broker, you can search for one on the MyCalChoice website.
The rules of business are different today than they were just two years ago. Employees are expecting more from their employers. When they don’t get it, there’s a good chance they will leave. The U.S. Department of Labor says 47 million people quit their jobs in 2021.
It’s a competitive talent marketplace. To attract and retain workers, a comprehensive benefits program is more important than ever. A single health plan offering is not enough. It’s not what employees want or expect.
What Are Employee Benefits?
Employee benefits can include a wide range of things that employees are looking for. While health insurance ranks high among “must have” employee benefits, workers are also looking for other things in their employee benefit package. Based on the MetLife 19th Annual U.S. Employee Benefit Trends Study, released in 2021, employees often value other benefits, including:
- A 401(k) or other retirement plan – viewed as a must have or nice to have by 95% of employees
- 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 nice to have by 90% of employees
- Health Savings Account (HSA) – considered a must have or nice to have by 85% of employees
- Flexible Spending Account (FSA) – considered a must have or nice to have by 83% of employees
CaliforniaChoice empowers you to offer health care freedom and flexibility to your employees. And, you can stay focused on your business. Our unique program provides the greatest access to doctors, specialists, and hospitals in the state and includes:
- Eight health plans: Anthem Blue Cross, Cigna + Oscar, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage
- 100+ HMO, PPO, EPO, and HSA-qualified options
- A choice of full and limited networks
- Greater employer cost control with Defined Contribution (you decide what you want to contribute to employees’ health care
- Single source administration (one website to manage benefits, one toll-free number for customer care)
- Value-added extras such as health, fitness, entertainment, travel, and other discounts; HR support from Mineral; FSAs for employees; COBRA or Cal-COBRA administrative services; a Premium Only Plan that lets employees increase take-home pay using pre-tax dollars to pay their share of insurance premiums; and more
Employee Benefit Advantages
Offering a comprehensive benefits package can help you set your business apart from other employers because:
- Employees value benefits and feel better about their jobs
- Benefits reduce absenteeism – healthy employees are more focused and productive, and are less injury-prone
- There are a reduced costs – even when employees are contributing to the cost of their health insurance, their share is typically lower than what they might pay for individual coverage
For you and your company, another benefit is deductibility. You can usually deduct the full cost of premiums as an ordinary business expense. That includes costs for employees’ and dependents’ health insurance.
If you take advantage of the Premium Only Plan (Section 125/POP) mentioned above, you can also reduce your company’s payroll taxes. Added savings are possible for a High Deductible Health Plan or if you contribute to a qualified Health Savings Account (HSA).
Talk with a broker about to learn more about your health care options. Working with a broker won’t cost you more. In fact, it may save you money because a broker will help you find coverage your employees will appreciate, while helping you stay within your budget.
An Important Reminder for Employers with 5-49 Employees
If you have five or more employees of any type (full-time, part-time, or seasonal), and you don’t already sponsor an employee-retirement plan, be aware of an approaching deadline. You must enroll your employees in the state-run CalSavers program by June 30, 2022. Link to the CalSavers website to learn more. Employers with 50-99 employees had a prior registration deadline of June 30, 2021.
Before the Affordable Care Act (ACA), “full time employees” were generally defined as those working a 40-hour workweek. Those working fewer hours – whether 10, 25, or another number – were part-time.
However, under the ACA, full-time workers are those working an average of at least 30 hours per week, or at least 130 hours per month. That discrepancy has prompted many employees to ask, “What is full-time? Does my employer have to offer benefits to me if I work 30 or more hours?”
The answer is, “It depends.”
Employers with 50 or more full-time or full-time equivalent (FTE) employees – are required to offer health care benefits to those working at least 30 hours a week or at least 130 hours a month. If an employer does not offer employee benefits, the business is subject to a tax penalty.
For small employers – those with fewer than 50 full-time employees – offering employee benefits is discretionary. There’s no requirement to offer benefits. The decision is left up to the employer.
Seasonal workers do not have to be included in the employer’s full-time equivalent employee calculation.
If a smaller employee not subject to the ACA employer mandate does choose to offer health coverage to its employees, that coverage must meet certain ACA specifications.
If you have a workforce of full-time and part-time employees, and you are unsure about how to calculate your group size, visit HealthCare.gov or CalChoice.com to use the ACA calculators offered on those sites.
While many employers with fewer than 50 FTE equivalent workers choose to offer employee benefits, there’s no requirement that they do so. The only requirement is that employers be equitable in their treatment of employees. The same standards apply to all employees when determining benefits eligibility. If the employer sets a 30-, 35-, or 40-hour requirement, it applies to all workers. Offering benefits to one employee who works 36 hours, and requiring others to work 40 hours to be benefit-eligible could trigger a discrimination lawsuit.
In a competitive talent marketplace, many smaller employers choose to offer employee benefits because it helps them attract and retain their top employees. Workers appreciate those benefits, too – especially health insurance. In the 2021 MetLife Annual Benefit Trends Study, 85% of employees put health insurance at the top of their “must have” list – and another 10% say health insurance is “nice to have.”
Talk With a Broker to Learn More
If you want to find out if you’re getting the most value for your benefit dollars – or if you want to add employee benefits for your employees – talking with a broker is a great place to start. Most brokers offer their services at no cost to you. If you don’t have a broker, you can search for one on the MyCalChoice website.
The world of group health insurance can be difficult to navigate for small business owners – beginning with the quote itself. Whether you’re looking for coverage for the first time or considering changing your plan, here are some insights that will help you understand your CaliforniaChoice health insurance quote.
Here’s a snapshot of the sections you’ll find in your quote for health insurance:
The first section provides an overview of how the CaliforniaChoice program works:
- Choice: You set your own budget, have a diverse selection of coverage options, and have no minimum participation across the eight plans offered through CaliforniaChoice.
- Access: We offer the most doctors and hospitals in a single program. You can also choose from multiple provider networks. With so much choice, you and your employees may be able to keep your current doctor, medical group, specialist, hospital, and prescriptions.
- Solution: As your needs change, you can stay in the CaliforniaChoice program and only change your selected health plan. It’s that simple.
- Optional Benefits: You can add Dental, Vision, Chiropractic & Acupuncture, Life Insurance and Accidental Death & Dismemberment for your employees, too.
- Online Enrollment: CaliforniaChoice online enrollment helps you by speeding up your group’s enrollment, increasing efficiency, and offering you better control.
- Value-Added Extras: The Business Solutions Suite and Member Value Suite give you and your employees valuable benefits at no added cost. Through the Business Solutions Suite, depending on your group size, you may be eligible for a Flexible Spending Account (FSA), COBRA billing services, a Premium Only Plan (POP), and HR support from Mineral. Our Member Value Suite offers CaliforniaChoice members access to discounts on entertainment, dental and vision care, wellness, hearing services, and prescription drugs. Ask your broker for details.
Your proposal includes a copy of the census provided to us for your group. All of the information in your quote is based on this census, including any coverage for dependents. If you need to update your group census, talk with your broker.
3. Setting Your Health Care Budget
There are two ways to contribute to your employees’ benefits from CaliforniaChoice. You can select a Fixed Dollar Amount or a Percentage of Premium.
Regardless of your choice, the amount must equal or exceed 50% of the lowest plan premium. For example, if the lowest premium is $2,000 per month per employee, your fixed-dollar premium for each employee must be at least $1,000.
Your quote includes a summary for multiple Affordable Care Act (ACA) tiers – Bronze, Silver, Gold, and Platinum – as well as Total Choice, which includes plans in all four tiers. Different columns on your summary in this section include:
- The lowest-cost health plans available by tier or tier combination.
- The total premium for employees in the lowest-cost health plan.
- The total premium for employees’ dependents in the lowest-cost plan available.
- The total group premium for the lowest-cost available health plan.
- Your net cost if you contribute 50% to employees’ premiums and 0% to dependents’ premium.
- Your net cost if you contribute 75% to employees’ premiums and 0% to dependents’ premium.
You can work with your broker to calculate different percentage contributions to premiums. With CaliforniaChoice, the choice is yours.
4. Ancillary Rate Summary
If you and your broker discussed Ancillary coverage – for Dental, Vision, Chiropractic & Acupuncture, and Life and AD&D coverage, the premiums (for employees and dependents) are shown in this section.
5. Employee Worksheet
Here you’ll find a sample Worksheet showing the plan options available to your employees. The Worksheet shows the monthly premium prior to your contribution and the cost per pay period to the employee.
It breaks down HMO, PPO, EPO, and other options from which employees can choose.
Information about CaliforniaChoice’s Smart Decision Technology is also summarized in this section.
Your quote summarizes the consolidated administration available to you and your employees through CaliforniaChoice, including:
- Enrollment services: Choose a paper or online enrollment for your group. Working with your broker, we offer onsite meetings or virtual enrollment meetings, where we walk your employees through our program.
- Coverage updates: Employees can make online updates when they have a qualifying Life Event such as marriage, birth of a child, or other eligible changes.
- Customer service: We take service seriously. When you call, you’re likely talking with someone who not only works for CaliforniaChoice, but is also an active member who understands the program inside and out.
- Account changes: Managing your account and your employees’ benefits is simple at calchoice.com. With an online account, you can update your profile and billing information, generate a New Hire Quote, review and approve pending changes, order ID Cards, and more. You can also download forms and documents (including your Administrative Handbook, Group Service Agreement, and more). If you still have questions, you can schedule a meeting with your account representative directly from our website.
- Billing: We’ll send one monthly bill for all of your employees’ coverage. What could be easier? Set up Auto Pay and never miss a bill again. It’s simple and secure.
A sample invoice is also included in this section of your proposal, along with Employee and Dependent Rates, Medical Benefit Summaries, and Ancillary Benefit Summaries.
Talk With a Broker
Getting a custom quote for CaliforniaChoice starts with your broker. If you don’t have a broker, we can help you find one.
Offering a comprehensive employee benefits program is a proven approach for attracting strong talent in a competitive market. Year after year, in survey after survey, employee benefits rank highly in what motivates employees beyond good pay.
Employee Benefits Package
In the MetLife 19th Annual U.S. Employee Benefit Trends Study from last year, employees prioritized their top benefits in this order:
- Health Insurance – 85% said it is a “must have” and another 10% said it’s “nice to have”
- 401(k) or other retirement plan – 78% consider it a “must have” and another 17% said it’s “nice to have”
- Paid and unpaid leave – 71% consider it a “must have” and another 23% said it’s “nice to have”
- Dental Insurance – 70% consider it a “must have” and another 25% said it’s “nice to have”
- Vision Insurance – 67% consider it a “must have” and another 25% said it’s “nice to have”
- Life Insurance – 61% consider it a “must have” and another 30% said it’s “nice to have”
- Disability Income – 51% consider it a “must have” and another 39% said it’s “nice to have”
- Health Savings Account – 46% consider it a “must have” and another 39% said it’s “nice to have”
- Critical Illness – 44% consider it a “must have” and another 43% said it’s “nice to have”
- Flexible Spending Account – 42% consider it a “must have” and another 41% said it’s “nice to have”
- Accident Insurance – 42% consider it a “must have” and another 45% said it’s “nice to have”
- Financial Wellness – 38% consider it a “must have” and another 44% said it’s “nice to have”
- Hospital Indemnity Insurance – 38% consider it a “must have” and another 45% said it’s “nice to have”
- Cancer Insurance – 35% consider it a “must have” and another 47% said it’s “nice to have”
- Home Insurance – 32% consider it a “must have” and another 39% said it’s “nice to have”
- Auto Insurance – 32% consider it a “must have” and another 41% said it’s “nice to have”
- Legal Services – 32% consider it a “must have” and another 44% said it’s “nice to have”
BestMoneyMoves.com found similar results in 2021, with Financial Wellness Programs ranking first, followed by Flexible Work Arrangements, Health Insurance, and Paid Time Off.
Beyond helping you attract and retain workers, there are additional advantages to offering a comprehensive employee benefits package, including:
1: Higher job satisfaction for employees: Employees value benefits and tend to feel more favorable about their jobs when they have a strong package (and you as their employer, too). When employees are happier, they’re more productive and show increased company loyalty.
2: Reduced absenteeism: When you have healthy employees, they are on the job more regularly. They take less time off due to illness, are more focused and productive, and less prone to injuries.
3: It’s tax deductible: Employers can generally deduct the full cost of premiums for employees’ (and dependents’) health insurance as an ordinary business expense. That can save you money on your federal and state business taxes. Some firms may qualify for a tax credit.
4: Reduced costs/savings for workers: Group health plans are usually cheaper than individual health plans. Even if employees are contributing to the cost, their share is lower than what they might pay for coverage in the private insurance marketplace (or through a public state exchange like Covered California).
5: Reduced payroll taxes: In addition to benefits being tax-deductible for your business, you can reduce your payroll taxes when you offer your employees a Section 125 Premium Only Plan (POP). That’s because a POP lets employees pay their share of premiums with pre-tax money, increasing their after-tax income. Further savings are possible if any employees have a High Deductible Health Plan, a POP, and a qualified Health Savings Account (HSA). You can usually deduct your HSA contribution for employees from your business taxes, too.
There are additional advantages offered by CaliforniaChoice, the multi-carrier private exchange built for California small businesses:
• More choice: You and your employees can select coverage from eight leading health plans – Anthem Blue Cross, Cigna + Oscar, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage
• Plan diversity: We offer a roster of 100+ HMO, PPO, EPO, and HSA-qualified options, so it’s easy to find coverage that best suits your individual or family health care needs
• Greater cost control: Defined Contribution means you decide just how much you want to spend on your employees’ health care – and it’s locked in for 12 months
• Single source administration: It’s easy to manage your benefits through one website and toll-free number when you or your employees need assistance
• Value-added extras: In addition to great health care, you and your employees have access to Dental, Vision, Chiropractic, and Life Insurance, HR support, a Flexible Spending Account and Premium Only Plan, COBRA services, hearing services, and the ChooseHealthyTM program offering savings on health and wellness – plus discounts through Cal Perks on hearing, prescription drugs, entertainment, travel, and more
Talk with your broker about all of the ways employee benefits can help you, your business, and your employees. If you don’t already have a broker, we can help you search for one. Using a broker won’t cost you more. In fact, it may help you save more because a local broker will help you compare plans in your marketplace.
Fully Insured Vs. Self-Funded
If you choose a fully insured Affordable Care Act (ACA) compliant plan, it must provide coverage for 10 “Essential Health Benefits” (EHBs):
- Ambulatory patient services (outpatient care you can get without being admitted to a hospital)
- Emergency services
- Hospitalization (including surgery and overnight stays)
- Pregnancy, maternity, and newborn services
- Mental health and substance use disorder services (including behavioral health treatment, counseling, and psychotherapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care (Adult Dental and Vision coverage are not EHBs)
Where you get coverage or what type of plan you and your employees select isn’t a factor. All ACA-compliant plans must include these benefits.
With a fully insured health plan, the risks fall primarily on the insurer, since it’s responsible for the payment of all claims.
Typically, in a group health plan, the employer and participating employees share the annual premium cost. Some businesses may pay more toward their employee premiums, but usually, employers pay at least half of the cost. The 2021 benchmark study by the Kaiser Family Foundation (KFF) found, “On average, covered workers contribute 17% of the premium for single coverage and 28% of the premium for family coverage.”
An insurer or other organization may be responsible for the administration of a health plan that is self-funded. The risks are on the employer in the event of a catastrophic claim. This can sometimes work well for larger employers but may not be the best choice for smaller businesses. Of course, an employer can choose to partially self-fund employees’ health coverage, while limiting the risk with stop-loss insurance.
A third option is a Level-Funded Health Plan, which can be a more affordable alternative. The Society for Human Resource Management (SHRM) published an article on level funding in 2021; it may be helpful if you’re unsure of whether self-funding is something you want to consider for your business.
Depending on the source for your group’s health coverage, employees may have access to different kinds of plans, including:
- HMO (Health Maintenance Organization) plans: An HMO is a health plan where the insured selects a Primary Care Physician (PCP) to help manage a patient’s care in the HMO’s network of doctors, hospitals, and specialists. 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 emergency cases. Premiums for an HMO are typically lower than for other plans.
- PPO (Preferred Provider Organization) plans: A PPO offers its members more flexibility, although at a higher premium. A patient is, generally, able to go directly to an in-network doctor, specialist, or hospital without a referral, and care within the network is offered at pre-negotiated, discount rates. PPO members also have the freedom to go to providers outside of the PPO network, although with 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, you need to get your health care through a doctor, specialist, or hospital that is part of the EPO network. Like with a PPO, you are likely able to go to a specialist (without a referral) as long as the provider is in-network. EPO premiums are greater than HMO premiums; however, they typically are less than PPO premiums.
A High Deductible Health Plan (HDHP), which can be an HMO, EPO, or PPO, may offer a lower monthly premium; however, the insured has to pay more health care costs upfront before the plan begins to pay its share. An HDHP can often be combined with a Health Savings Account (HSA), which gives insured persons the ability to pay for qualified medical expenses with funds free of federal taxes.
The limits established by the Internal Revenue Service (IRS) for 2022 define an HDHP as one with a deductible of at least $1,400 for an individual or $2,800 for a family. Total annual out-of-pocket costs (deductibles, copayments, and coinsurance) cannot exceed $7,050 for an individual or $14,100 for a family. These limits do not apply to out-of-network services.
Employees Value Benefits
According to multiple surveys, including MetLife’s 19th Annual U.S. Employee Benefits Trends Study 2021, workers value employee benefits. MetLife found 85% of employees see health insurance as a “must have” benefit – and another 10% view it as “nice to have.” Just four percent view health insurance as not needed. Employees in other surveys have expressed similar views in the past several years. And, of course, the COVID-19 pandemic has prompted some employers to reevaluate benefits as part of their talent attraction and retention strategy.
Depending on the programs you’re considering for your employees, you might want to look beyond health insurance benefits. Many insurers and exchanges, like the CaliforniaChoice multi-carrier, employee-choice exchange, offer value-added benefits that could tip the scale in their favor. For example, in addition to increased cost control, CaliforniaChoice gives you the opportunity to add optional benefits for Dental, Vision, Chiropractic, and Life. You and your employees also get no-extra-cost benefits through the Business Solutions Suite and the Member Value Suite.
Shop and Compare with Help from a Broker
If you want to know more about the employee benefits available to you, your business, and your employees, a great place to start is to talk with your broker. If you do not currently have an employee benefits broker, we can help you find one who can provide a custom quote for your business. Contrary to what you might think, broker services are available at no cost to you.
In case you missed it, the California legislature’s sixth attempt to pass single-payer legislature died on January 31, 2022. As proposed, Assembly Bill 1400 (AB 1400) would have eliminated health care in California as it is known today.
AB 1400 aims to establish a single-payer, government-run system known as “CalCare.” It would affect health care services for all residents in the state. Had it moved forward, the State Assembly, State Senate, and governor would need to give final approval.
The funding to support AB 1400 also require approval by the legislature, governor, as well as voters. The proposed funding would come through a state constitutional amendment.
Under AB 1400, the following programs in California would be eliminated:
- All existing individual and group health insurance, including employer-sponsored coverage
- Medicare Advantage
- Medi-Cal (the state’s Medicaid health care program)
- CHIP (the federal government’s Children’s Health Insurance Program)
- TRICARE (health care for uniformed service members, retirees, and dependents)
- Long Term Care plans
- Covered California (Individual and Small Business plans + Premium Tax Credits)
Covered services under AB 1400 and CalCare generally include:
- All traditional medical services
- Dietary and nutritional therapies
- Dental care
- Chiropractic care
- Vision services
- Prescription drugs
- Necessary transportation for health care or long-term care
- Rehabilitative services
- Mental health treatment
- Skilling nursing substance use treatment
- Additional services authorized by the CalCare Board of Directors (nine unelected, government-appointed individuals)
Costs for Single-Payer
Estimates for Single-Payer in California exceed $400 billion annually. That’s nearly 50% more than the 2022-2023 state budget of $285+ billion. The proposed funding source is new taxes on businesses, employees, and individuals. Additional funding would come from the federal government, including funds currently reserved for these existing programs in California: Medicare, Medicaid (Medi-Cal), CHIP, and subsidies for Individual plans purchased through Covered California.
The Assembly Constitutional Amendment 11 (ACA 11), if approved by voters as a companion measure to AB 1400, imposes new excise taxes, payroll taxes, and State Personal Income CalCare tax as follows:
- Gross Receipts Tax: Annual excise tax of 2.3% of gross income above $2 million for all qualified businesses in California (gross income, not profit)
- Payroll Taxes – Employer Share: Employers with 50 or more employees pay 1.25% of payroll tax on wages and other compensation of employees
- Payroll Taxes – Employee Share: Employees earning more than $49,900 in wages or compensation pay 1% payroll tax
- Income Tax: 1.45%+, on a sliding scale for higher-income earners, as an added personal income tax
Roles for Insurers, Employers
Generally, insurance companies and employers would have no role in delivering health insurance. The Single-Payer legislation shifts responsibility to a new state bureaucracy. Coverage for dental, vision, and chiropractic or acupuncture would also be part of CalCare.
That means no plan choices made by the employer or individuals. Coverage would be the same for all Californians. The role of brokers also goes away with a Single-Payer program.
Role of Physicians, Care Networks
If AB 1400 became law, all physicians in the state would work exclusively through CalCare. The state would also fund hospitals. For example, Kaiser Permanente health care facilities and staff would instead work for the state.
Obstacles to Single-Payer Health Care
Even if AB 1400 was passed by the State Assembly, it required approval by the State Senate. Then the governor would need to sign for it to become law. The funding source also required approval through the proposed Assembly Constitutional Amendment 11. Thisneeds a two-thirds approval in the legislature as well as voter approval.
Leading up to the Assembly’s failure to pass the legislature by its January 31, 2022, deadline, getting Governor Gavin Newsom’s final approval was not a certainty.
Governor Newsom has an alternative plan to provide more Californians with access to care. He has proposed expanding Medi-Cal in California to more low-income adults regardless of citizen status. This would close the six percent “uninsured gap” and push the state toward 100% universal coverage. (Ninety-four percent of residents have access to health care through existing California programs and options.) The Newsom alternative proposal would cost taxpayers $2.2 billion annually. That compares to an anticipated $400 billion cost for CalCare.
Without funding through ACA 11, the Single Payer program set forth in AB 1400 could not have moved forward.
The Biden Administration generally does not favor Single Payer. Instead, it wants to build upon the existing successes of the Affordable Care Act (ACA). Approval and support by the White House would be an ongoing struggle. That is especially true as it relates to future presidential administrations. The ACA 11 proposal assumes the federal government would provide waivers to California, allowing the state to use existing federal funds for Medicare, Medicaid, and other programs for the new California initiative.
Another potential obstacle to AB 1400 (or future, similar legislation) is federal pre-emption. More than 4.6 million Californians are covered through self-funded or union plans managed by ERISA. The federal Employee Retirement Income Security Act sets minimum standards for voluntary health plans in private industry. The latest Single Payer legislation did not define how Californians covered by those plans would be regulated.
Also not addressed in AB 1400 were Proposition 98 and the Gann Limit (Proposition 4). Passed by California voters in 1988, Prop 98 establishes a guaranteed minimum level of funding for public schools and community colleges. Prop 4 limits growth of expenditures for publicly funded programs.
Universal Health Care vs. Medicare for All vs. Single Payer
There is often confusion when it comes to describing alternate, government approaches to health care. It goes by many names. Among them is “Universal Health Care,” which means everyone has access to, and is covered by, health insurance, regardless of how it is attained. That includes employer-sponsored or individual private health insurance, Medicare, Medi-Cal, CHIP, TRICARE, etc.
Universal Health Care can be achieved through actions like AB 1400. Or, it could be expanded at the federal level through the existing Medicare program for seniors and disabled Americans. Medicare, funded largely by payroll taxes, allows eligible persons to obtain low-cost or premium-free health coverage, while offering relatively inexpensive copays, deductibles, and coinsurance.
Other coverage in the Medicare program, such as doctor visits, outpatient care, prescription drugs, etc., can be purchased separately for relatively inexpensive premium payments. The current Medicare program is successful. However, it often has solvency issues. “Medicare for All” is a proposal to extend this program to all Americans – instead of only seniors and the disabled.
A “Single Payer” health care system is when only one system exists for all individuals and families to access, receive, and pay for health care. All other systems would cease to exist. This type of program can be enacted federally, across all 50 states, or it can be implemented by individual states. About a dozen U.S. states, including California, Colorado, and Vermont have attempted to create single-payer laws. All have largely stalled due to the costs.
While AB 1400 is now history, California legislators have tried six times to implement Single Payer or similar legislation. So, a similar effort could occur during a future legislative term. Whether those future efforts succeed, many questions remain:
- Could the state legislature really pass such a measure, if it couldn’t gain approval in 2021 when Democrats already have a super-majority in the state Assembly and Senate?
- Is it too ambitious to propose a system that eliminates all private and supplemental health insurance in California? Would it be better to make changes in stages?
- Do Californians really want a state-run agency in charge of their personal health?
- How would a move to Single Payer be funded?
- Would Californians favor a system where everyone’s coverage is the same? (In other countries with a government-run health program, critics say the wait for care is often too long.)
- What would the job losses be? A move to Single Payer would mean job cuts in many fields. It would affect brokers, insurance companies, hospitals, and many others.
- What jobs would a Single Payer system create? (Would they be enough to offset anticipated job losses?)
- If there were a move to “Medicare for All” at the federal level, would it overhaul the existing health care system? Or, would it continue to incorporate a role for employers, brokers, insurance companies, and doctors?
Talk With a Broker About Your Options Today
Health care is changing . . . and no one knows for sure what’s ahead. Right now, providing employees with health insurance and other employee benefits is a proven winner – and employer differentiator – for workers. The 2021 MetLife Annual Benefit Trends Study found 85% of employees put health insurance at the top of their “must-have” list. Another 10% say it is “nice-to-have.” If being able to attract and retain your most valued workers is important, employee benefits are important, too. To learn more about the potential benefits costs to your business, talk with a broker. If you don’t have a broker, you can search for one on the MyCalChoice website.
No doubt you’ve read – or experienced first-hand – the “Great Resignation” with millions of workers leaving their jobs in 2021 and 2022. It’s a phenomenon affecting private employers as well as state and local governments. (CNBC reported last month that around four million workers quit their jobs between July and November 2021.) However, in a competitive talent marketplace, employee benefits can make the difference.
Consider the following 11 reasons why you should offer employee benefits.
1. Employee retention
The right employee benefits package can help you keep your current employees. MetLife’s 19th Annual U.S. Employee Benefits Trends Study 2021 found nearly all employees put health insurance at the top of their benefits list. Ninety-five percent consider it a “must have” and another 10% say it’s a “nice to have” benefit.
2. Attract the most qualified employees
In today’s environment, employee benefits can help set you apart from other employers. You can tip the scale in your favor for recruits weighing multiple job offers. According to Fractl, when employees are choosing between a high-paying job and a lower-paying job with better benefits, a majority (88%) will give “some consideration” (34%) or “heavy consideration” (54%) to the firm offering better benefits.
3. Benefits boost employee satisfaction
The Society for Human Resource Management (SHRM) says benefits are big contributors to employees’ job satisfaction, year after year. The only compensation package items considered more important by a majority of employees are pay and paid time off.
4. The pandemic has increased the value and need to have health coverage
The COVID-19 pandemic has prompted many persons to reconsider what they view as important. Health insurance continues to rank high for employees and their families. Multiple employee surveys put health insurance among the most sought-after employee benefits.
5. Save money on your business taxes
Employers can generally deduct 100% of the cost of premiums paid for health insurance for employees and/or dependents. This applies to both federal and state income taxes.
6. Avoid paying Affordable Care Act (ACA) penalty for qualified employers
If you have 50 or more full-time employees, including full-time equivalents, you are subject to ACA’s Applicable Large Employer (ALE) guidelines. That means you are required to offer health insurance to qualified employees. If you do not offer coverage, you are subject to ACA penalties. (If you are not sure if your business is an ALE, visit the IRS website to learn more.) By offering coverage to at least 95% of full-time employees and their dependents, you can avoid ALE penalties. The 2022 “pay or play” penalty is $2,750 for each full-time employee minus the first 30. For example, an employer with 100 employees would be assessed $192,500 (100 – 30 = 70 x $2,750 = $192,000).
If coverage is not “affordable” by ACA standards, or your plan does not cover at least 60% of the total allowed cost of benefits under the plan, a penalty may also apply. Affordability comes into play if the premium is more than 9.61% of the employee’s annual household income for single-only coverage in 2022. Link to a 2021 article published by SHRM for details.
7. Get the small business health tax credit for qualified employers
Depending on your source for health insurance benefits for your business, you may qualify for the federal government’s Small Business Health Care Tax Credit. This could be worth up to 50% of the costs you pay for employees’ premiums (or 35% if your business is a non-profit).
To claim the Small Business Health Care Tax Credit as a California employer, you must enroll in a Small Business Health Options Program (SHOP) plan offered through Covered California, and:
- You must have fewer than 25 full-time equivalent (FTE) employees.
- Your average employee salary is about $56,000 per year or less.
- You pay at least 50% of your full-time employees’ premium costs.
- You offer SHOP coverage to all full-time employees. (To qualify for the tax credit, you do not have to offer coverage to dependents or employees working fewer than 30 hours per week.)
8. Protect the overall wellness of your employees with additional wellness programs
In addition to delivering outstanding health insurance to your employees, when you offer CaliforniaChoice, employees can take advantage of added wellness benefits. These are available through the ChooseHealthyTM program, with discounts of up to 57% on Garmin, Vitamix, and Fitbit products, fitness memberships for $25 a month plus additional benefits like Dental, Vision, Hearing Services, and more in the CaliforniaChoice Member Value Suite.
9. Build a healthy company culture
Offering a comprehensive benefits program shows your employees you value their well-being and their health. Moreover, healthier employees are more productive, which contributes positively to your company’s bottom line.
10. Help employees reduce their costs of health insurance
Comprehensive group health premiums are typically lower than individual health insurance premiums. That’s true even when employees are sharing the cost with their employers. Your decision to offer CaliforniaChoice (or another benefits program) means a lower insurance cost to your employees.
11. Tax break for employees
Employee benefits are not taxable to your employees. Because employees pay only a portion of their health insurance premiums (often at lower rates – as mentioned above), they save on their premiums, are able to pay their share with pre-tax dollars (with a Premium Only Plan), and have more funds left in their paychecks.
Talk With a Broker to Learn More
To find out more about the employee benefits available to your business and your employees, talk with a broker. If you don’t have a broker, we can help you find one who can provide you with a custom quote at no cost.
At CaliforniaChoice, we’re committed to educating small businesses on the options they have for employee benefits. Our free monthly webinar series tackles key focus areas and frequently asked questions so you can make an informed decision for your employees.
You’ll learn how you can:
- control your monthly costs
- expand options for employees
- streamline your benefits administration
The webinar series also take a look at why more small businesses in Califoria are choosing CaliforniaChoice. With our unique program you have:
- Budget Control: You determine your health care budget. Employees then use that amount toward the health plans they like best.
- Simplified Administration: Receive a single, consolidated monthly bill for everyone’s coverage.
- Coverage Diversity: Enjoy a wide selection of HMOs, PPOs, EPOs, and HSA-qualified coverage. Choose coverage offered by Anthem Blue Cross, Cigna + Oscar, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, or Western Health Advantage.
- Extensive Provider Network: Access 80,000+ doctors and nearly 400 hospitals.
- Locked-in Rates: Your benefit rates are locked-in for 12 months. There are no increases for one year.
- Optional Benefits: Dental, Vision, Chiropractic, and Life benefits can be easily added.
- Free Discounts: Take advantage of discounts on Dental, Vision, and Hearing services, Rx, fitness center memberships, entertainment, and more.
- Free Services: Get HR Support, a Flexible Spending Account, COBRA administration, and a Premium Only Plan (initial case set at no charge).
Sign up for our upcoming webinar to learn more. It’s happening Wednesday, February 16, at 10 a.m.
If you would like to learn more about CaliforniaChoice by talking with a broker, we can help you find one.
Born and raised in California, CaliforniaChoice celebrates the fact that each of your employees is different – with their own unique needs. We embrace those differences because we, too, are different. Our program gives your employees the freedom to choose the health plan they want.
With a California Different Approach, We Make Health Care Simple
With CaliforniaChoice, you have the freedom to offer it all while staying focused on what’s important to you – your business. We’ve partnered with eight top health plans with a variety of HMO, PPO, EPO, and other benefits options to choose from – all at different price points so you can control costs.
Together with our health plan partners, we offer the greatest access to doctors, specialists, and hospitals in the state, in one program:
- Eight health plans: Anthem Blue Cross, Cigna + Oscar, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage
- 100+ HMO, PPO, EPO, and HSA-qualified options
- Full and limited networks
- Greater employer cost control with Defined Contribution
- Single source administration plus value-added extras
For example, one of your employees might choose a PPO because of a particular doctor in the network, while another employee looking for a low copay may select an HMO. A third employee might prefer a health plan serving only their community. Whatever your employees need, it’s their choice.
Smart Decision Technology
We also have tools to simplify the enrollment process, provide more information about each plan option, and support doctor selection. Our Smart Decision Technology helps your employees make informed decisions when they enroll.
Additional Benefits and Services
Dental, Vision, Chiropractic, and Life are also available to all businesses. Some benefits are optional while others are included at no additional costs as part of the CaliforniaChoice Member Value Suite.
The products and services in our Business Solutions Suite are also available to employers at no cost. They include:
- HR support with 24-hour access to an online database of downloadable forms, job descriptions, and Q&As for common HR issues
- Flexible Spending Accounts (FSAs) which allow employees to save on taxes by setting aside money on a pre-tax basis to pay for health care
- COBRA and Cal-COBRA related services based on group size
- Premium Only Plans (POP) to give employees the ability to increase take-home pay by using pre-tax dollars to pay their Medical and Dental premiums
Talk with your employee benefits broker to learn more. If you don’t have a broker, we’ll help you find one.