The Affordable Care Act (ACA) improved access to health insurance for millions of Californians. That includes those who work in farming and ranching. However, individual health insurance through the ACA-created state exchange is not the only coverage option.
Health Insurance for Farmers
If you operate an agriculture or ranching business in California, you may want to consider:
- Small group coverage through CaliforniaChoice, a private health insurance exchange operating in California since 1996. CaliforniaChoice is available to groups of up to 100 employees through a network of brokers statewide.
- Small group health coverage through the state’s public exchange, Covered California for Small Business.
- Individual health insurance through a carrier or with the assistance of a broker.
- FBN Health Insurance. Level-funded Group Health offered and administered through Benefit Plan Administrators. You must be a member of Farmer’s Business Network. Coverage is available for groups of 1-9 and 10+ employees. (A level-funded health plan is a type of self-funded plan where the employer contributes a steady monthly payment to cover costs for administration, claims payments, and stop-loss insurance.)
The Highest Production Nationwide
According to California Polytechnic State University (Cal Poly), California includes the most productive agricultural counties in the nation. Nine of the top 10 producing counties are in California, which produces nearly half of U.S.-grown fruits, nuts, and vegetables.
While data is limited, a Department of Labor report for 2015-2019 found about one-third (31%) of California farmworkers had employer-provided health insurance. More than half (54%) reported insurance through a government program. Six percent said they or a spouse paid for coverage, and six percent had coverage through a spouse’s, parent’s, or other family member’s plan. In all, according to the U.S. Department of Agriculture (USDA), California had nearly 70,000 farms and ranches in 2020.
Group Health Coverage
For employers looking to attract farm and ranch workers, health insurance is a sought-after employee benefit. It can reduce absenteeism, encourage loyalty, and boost job satisfaction among workers. Health insurance can help you foster a company “culture of caring.” It also reduces your employees’ out-of-pocket costs for care. Health insurance may also be tax deductible for your organization.
Keep in mind, if your business has 50 or more full-time employees, you could be required to offer health insurance. The same is true if you have the right combination of full-time and part-time workers. It’s a requirement of the ACA – the so-called employer mandate. If you are an Applicable Large Employer (ALE) and you don’t offer minimum essential coverage, your business could face ACA penalties.
If you’re not sure if your business is an ALE, you can use a group-size calculator to determine your ALE status. CaliforniaChoice offers an ACA Full-Time Equivalent calculator on its website. You can also learn more on the IRS website.
The California Department of Industrial Relations, Labor Enforcement Task Force, reminds employers it is important not to misclassify employees as independent contractors. It could lead to fines of $5,000 to $25,000 per violation plus unpaid payroll taxes.
CaliforniaChoice Coverage Options
The CaliforniaChoice private exchange provides tremendous flexibility. You can offer HMO, PPO, and EPO (Exclusive Provider Organization) choices to employees through one program. (If you don’t know how each works, read our prior blog post, Small Group HMO, PPO, and EPO Health Plan Options in California.)
One of the best features of CaliforniaChoice is that you decide what amount you want to contribute to employees’ coverage. You can choose a Fixed Percentage (of 50% to 100%) of a specific plan or benefit. Or you can contribute a Fixed Dollar Amount for each employee. Whichever you choose, you have to offer the same contribution to all employees.
CaliforniaChoice is already serving dozens of employers like yours in the farming and ranching business.
Talk With a Broker to Learn More
An employee benefits broker can help you find the right plan for your employees – and your budget. If you don’t already have a broker, you can search for here.