Whether you are considering health insurance for your employees for the first time, or planning to renew, rates are an important factor in the decision-making process. Here’s a look at what industry experts are forecasting for Small Group health insurance rates in 2019.

Annual Premiums on the Rise

In the fourth quarter of last year, CBS MoneyWatch reported employees should expect to see more of the same when it comes to health insurance in 2019 – more cost sharing in the form of increased premiums and higher deductibles. The Kaiser Family Foundation said in its 2018 Health Benefits Survey that annual family premiums rose for the eighth straight year. Since 2008, average family premiums have jumped 55 percent. That’s twice as fast as employees’ earnings and three times the rate of inflation.

More than a quarter of employees with employer-sponsored coverage have a plan with a deductible of $2,000 or more, up from 22 percent in 2017 and 15 percent in 2013. For companies with fewer than 200 employees, 42 percent have a $2,000 (or higher) annual plan deductible.

California Rates Also Increasing

California’s public health insurance exchange, Covered California, announced in the run-up to the individual 2019 Affordable Care Act (ACA) enrollment period that rates for 2019 increased an average of 8.7 percent statewide. In most parts of Southern California, the increase is nine percent, although Monterey, San Benito, and Santa Cruz counties face the highest increases: 16 percent on average. That compares to a 12.5 average increase statewide in 2018 and greater increases in other parts of the country – both for 2018 and this year.

What Does This Mean for You?

Your employees’ health insurance costs are influenced by a variety of factors:

• The number of employees at your business
• Whether dependent coverage is offered (and whether you pay for it or share the costs with your employees)
• Your plan design(s) – HMO, PPO, EPO, etc.
• Your selected ACA metal tier(s) – Bronze, Silver, Gold, or Platinum (or a combination)
• Employee and dependent ages
• Employees’ home ZIP Codes

The best way to control your costs is by choosing coverage that offers Defined Contribution, which allows you to choose the amount you want to contribute to your employees’ health insurance costs. 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. Each employee must receive the same amount.

From there, your employees apply your 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.

Other Money-Saving Tips

In the past, employers looking to reduce costs could raise employee deductibles or offer less-generous plans. However, for 2019, less than half are planning to make similar changes. In today’s talent marketplace, businesses need to offer competitive benefits packages in order to attract and keep their best employees.

As reported by the Society for Human Resources Management (SHRM), a Mercer study found more organizations are open to adopting new technology to manage medical expenses. One common strategy includes targeting specific health problems like diabetes with coaching and interactive glucose monitoring devices that transmit health data directly to a health care provider. Other strategies include tools to help employees match their health plan to their specific health needs, and using predictive analysis to identify opportunities to improve health plan performance.

A Health Savings Account (HSA) can also help employees with a High Deductible Health Plan. Funds in the HSA can go toward co-pays, co-insurance, and other out-of-pocket amounts. In 2019, the HSA limit is $3,500 for an individual and $7,000 for a family with a qualifying health plan (with a deductible of at least $1,350 for an individual or $2,700 for a family). There is no time limit on the use of HSA funds and they grow tax-free until withdrawn for eligible expenses, even if that’s during retirement.

More employers with fewer than 50 employees are now offering a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), which was created by Congress in 2016 as part of the 21^st Century Cures Act. A QSEHRA allows employers to offer a monthly tax-free allowance to employees to purchase individual health insurance or use for qualified medical expenses. Go here to read an Accounting Today article concerning QSEHRAs.

Get Help from an Expert

As you navigate the complexities of your employees’ health insurance, it helps to speak with an expert. An employee benefits agent can provide critical information on how to manage your expenses. Click here to connect with an agent in your area.

See How Our Program Works

CaliforniaChoice has been helping small businesses offer customized group health insurance solutions for more than 20 years. Check out this video to find out how CaliforniaChoice helps businesses choose the right group health insurance plan. With our program companies can control health care costs, while offering their employees access to eight health insurance plans.

Eight Insurance Carriers for the Price of One

Join over 300,000 Californians who have increased their health care options while keeping costs down.

With CaliforniaChoice you can provide medical, dental, vision, chiropractic, life, and ad&d in a single consolidated bill.

If you have a small business and you want to offer health insurance to your employee, there are three important things to know.

1. You Decide Who to Cover

If you’re a small business with fewer than 50 full-time and full-time equivalent (FTE) employees, the Affordable Care Act (ACA) does not require you to offer health insurance to employees. However, many smaller businesses offer employee benefits as part of their employee recruitment and retention strategy.

Small businesses do not have to offer coverage to employees’ dependents either, although many do – again, to help attract and retain top talent.

You also do not have to offer benefits to part-time workers (those averaging less than 30 hours per week) or seasonal workers.

2. You Set Your Budget

Controlling the cost of benefits is important for every business, but it’s even more important for a small business. The good news is you get to choose how much you want to contribute to your employees’ insurance premiums. Depending on the health plan or health insurance exchange you select, you may have a choice of a fixed percentage amount (50% to 100%) or a fixed dollar amount for each employee. If an employee selects a plan that costs more than you are contributing, he or she simply pays the difference. And, at renewal, you have the option to change your contribution – giving you control over your costs for another year.

You could qualify for a Small Business Health Care Tax Credit. To take advantage of this tax credit program, all of the following must apply:

• You have no more than 25 FTE employees
• Your average employee salary is about $50,000 or less
• You pay at least 50% of the annual premium for employees’ health insurance
• You offer all full-time employees coverage through a Small Business Health Options Program (SHOP) marketplace (like Covered California)

Link here to find out if your company qualifies for SHOP coverage.

3. You Choose Your ACA Metal Tier

The ACA divides health plans into four “metal” tiers: Bronze, Silver, Gold, and Platinum. The tiers offer different levels of cost sharing between your employees and their selected health insurance plan, as shown below:

Here’s a summary of the features of each tier:

Bronze

• Lowest monthly premium
• Highest out-of-pocket costs when seeking care
• A low-cost way to protect yourself from worst-case medical scenarios, like serious sickness or injury. However, while the monthly premium will be low, employees will have to pay for most routine care on their own.

Silver

• Moderate monthly premium
• Moderate costs when seeking care
• Employees pay a lower deductible than with a Bronze plan before the Silver plan begins to pay. This is a good choice for employees willing to pay a slightly higher premium (than Bronze) to have more of their routine care covered.

Gold

• Higher monthly premium
• Lower costs when seeking care
• Works well for employees willing to pay more each month to have more costs covered when being treated. If an employee needs frequent care, a Gold plan can be a good value.

Platinum

• Highest monthly premium
• Lowest costs when seeking care
• Deductibles are often lower, which means the plan starts paying earlier than other plan categories. This is often a great choice for employees needing a lot of care who are willing to pay a higher monthly premium, knowing that more of their costs are covered.

You can offer your employees access to a single ACA metal tier or multiple tiers, depending on which insurance carrier(s) or health insurance exchange you select for your group’s coverage.

Help Is Available

Offering health insurance to your employees is easier than you might expect. A health insurance or employee benefits agent can assist you in shopping for coverage and determining your benefits budget. Working with an agent is free, too. If you don’t have an agent, we can help you find one.

At CaliforniaChoice, we are all about offering you and your employees health care choices. That’s why we have expanded our Affordable Care Act (ACA) metal tier options for coverage effective in 2019.

You can now choose from three metal tier options for your CaliforniaChoice coverage:

1. SINGLE TIER: Access to a single ACA metal tier (Bronze or Silver or Gold or Platinum).
2. TIERED CHOICE: Access to plans and benefits in two adjoining metal tiers (Bronze/Silver, Silver/Gold, or Gold/Platinum).
3. TRIPLE TIER: Access to plans and benefits in three metals tiers: Silver, Gold, and Platinum.

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

How ACA Metal Tiers Work

Each metal tier offers a different level of cost sharing between the health plan/insurer and the insured employee (or dependent).

For employees who want to minimize their monthly premium, and may not need a lot of medical care, a Bronze metal tier HMO plan makes sense. For an employee who may want access to a broader network of doctors and specialists, a Gold tier PPO may be the way to go. For employees who can afford higher premiums, and want the lowest out-of-pocket costs when seeking care, a Platinum plan is appealing.

Learn More by Talking to an Agent

Call or email your employee benefits agent to learn more about the expanded metal tier options available from CaliforniaChoice. He or she can also share information on the many other ways CaliforniaChoice can help you offer affordable health insurance to your employees. If you do not have an agent, we can help you find one.

If you own or manage a small business and you’re considering offering health insurance to your employees, it’s important to be informed before making a decision. We’ve answered seven of the most common questions concerning health insurance for employees of small businesses.

1. Is health insurance required?

Currently, the “employer mandate” of the Affordable Care Act (ACA) is still in place. If your business employed, on average, a combination of 50 or more full-time and “full-time equivalent” (FTE) employees during six months or more of last year (or, this year, if you’re a start-up), you are considered an Applicable Large Employer. As an ALE, you must provide employees and their eligible dependents with affordable, minimum essential health insurance coverage. If you do not offer such coverage, your business is subject to ACA penalties if at least one full-time employee receives a premium tax credit for enrolling in health insurance through a state exchange (like Covered California).

If you have fewer than 50 employees, you are not required to offer health insurance coverage (nor are you subject to a penalty for not offering it). However, many small business owners do elect to extend such benefits to their employees. That’s because, in today’s highly competitive talent marketplace, health insurance and other perks can help level the playing field when it comes to attracting new employees and retaining your existing staff.

2. How is “affordable” coverage determined?

Affordability is determined by whether the employee’s share of the premium for personal coverage costs no more than 9.56% of his or her household income in 2018. The figure for 2019 is 9.86% of household income. If an employer’s coverage is not considered affordable, the business is subject to a penalty: the lesser of $3,480 for each full-time employee receiving a premium tax credit subsidy or $2,320 for each full-time employee (minus the first 30 employees).

3. What’s the maximum Waiting Period?

If you offer health insurance to your employees, you must offer it to all eligible employees within 90 days of the date they start their employment. Coverage must begin no later than 91 days after employment begins.

You can choose a shorter waiting period, such as 30 or 60 days, but you cannot offer a longer waiting period. Many employers choose to make coverage effective the first of the month following 30 days of employment. So, for example, if an employee started on May 15, coverage would be available beginning on July 1. (Link here to download a PDF of IRS guidance on the 90-day waiting period limitation.)

4. What are the rules on SBCs?

Businesses that offer health insurance to employees are required to provide a standard “Summary of Benefits and Coverage” (SBC) that explains what’s covered by each plan and the related costs. The SBC is designed to help employees better understand their health insurance options when comparing plans. Failing to comply with the ACA’s requirement concerning SBCs could subject your business to a fine. Your insurance company, health insurance exchange, or third party administrator will be able to provide you with an SBC in advance of your group’s enrollment.

5. What are the ACA reporting requirements?

The ACA requires Applicable Large Employers (see above) to report to the IRS annually on health insurance coverage offered – or not offered – to eligible employees and dependents.

It further requires reporting by all employers of any size who sponsor self-insured health insurance coverage or a QSEHRA (Qualified Small Employer Health Reimbursement Arrangement).

6. Is there a minimum employer contribution?

Employers with fewer than 50 full-time equivalent employees are not subject to the ACA’s employer mandate, so they are not required to make a certain percentage contribution to employees’ costs.

Small businesses looking to qualify for a Small Business Health Care Tax Credit must:

• Have no more than 25 full-time equivalent employees
• Pay employees average wages of no more than $52,000
• Pay at least 50% of the annual premium for employees’ health insurance, and
• Purchase coverage through a Small Business Health Options Program (SHOP) marketplace

Some health insurance carriers and administrators do require at least 50% of the premium be paid by the employer. Ask your employee benefits agent for information about the plans you’re considering.

7. Where can I get help?

Using a health insurance or employee benefits agent can help you save time and money. And, working with an agent is free.

Your agent can provide you with valuable assistance, including answers to any questions you may have – about health insurance, offering voluntary or employer-sponsored coverage (or a combination), and benefits budgeting. If you do not already have an employee benefits agent, we can help you find one.

In 1996, CaliforniaChoice challenged the health care status quo. We created the first multi-carrier, employee-choice private health insurance exchange designed to meet the needs of small businesses in California. Today, CaliforniaChoice serves more than 18,000 employers and 300,000 members, and our membership continues to grow.

If your organization has fewer than 50 employees, CaliforniaChoice can help you deliver valuable health insurance options to your employees. Here are five reasons to choose CaliforniaChoice:

1. Employee Choice

The modern workplace has evolved. Offering a single health plan option to your multigenerational workforce is no longer sufficient. Today’s employees have different health care needs. To compete for the most talented workers, you must be able to give your employees a choice.

CaliforniaChoice offers you access to eight different health plans statewide – and the greatest access to doctors, specialists, and hospitals in California – through a single program. You and your employees can choose from dozens of Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Exclusive Provider Organization (EPO), Health Care Service Plan (HSP), and Health Savings Account (HSA) compatible options.

For example, one employee might select a PPO from Anthem Blue Cross because of a specific doctor or hospital in its network. A second employee might choose an HSP from Health Net. Another employee who wants a lower copay plan might select an HMO from Kaiser Permanente or UnitedHealthcare. A fourth employee might want access to a regional option like Oscar, Sharp Health Plan, Sutter Health Plus, or Western Health Advantage. With us, the choice is yours.

2. Employer Cost Control

Controlling benefits costs is an important consideration for employers, and CaliforniaChoice makes it easy. Using what we call Defined Contribution, you choose how much you want to contribute to your employees’ health insurance premiums. You can choose a Fixed Percentage Amount (50% to 100%) toward a specific benefit, or a Fixed Dollar Amount, for each employee. (Your contribution must be the same for all employees.)

Each employee then uses your generous contribution toward the cost of the plan he she prefers. (Think of it as a sort of health care voucher.) If employees pick plans that costs more than your contribution, they simply pays the difference.

The amount you choose is locked in for a full year – and you can change it at your group’s renewal.

3. Optional Benefits

CaliforniaChoice offers great medical benefits for your employees, and the opportunity to offer additional benefits like Dental, Vision, Chiropractic & Acupuncture, and Life and AD&D. Employees can tailor their coverage to their specific individual or family needs.

CaliforniaChoice gives you the ability to meet nearly all of your employees’ health needs without the hassle of dealing with multiple insurance agents.

4. Free Value-Added Extras

When you make CaliforniaChoice coverage available to your employees, you also get no-cost extras.

CaliforniaChoice offers Smart Decision Technology to streamline the enrollment process, provide more information about each available plan, and simplify the process of finding the right doctor.

You can choose online or paper enrollment, or a combination, depending on the method that best suits your employees. In addition, throughout the year, your agent or our Customer Service team will help you when you hire a new employee, add coverage for a dependent, or make other changes.

Talk to an Agent to Learn More

If you’re ready to find out how CaliforniaChoice can help you offer health insurance to your employees, contact your employee benefits agent. If you don’t have an agent, we can help you find one.