How to Get Group Health Insurance — and What It Covers
In the wake of COVID-19, many employers are considering whether they can and should be offering health insurance benefits to employees. If you have questions on how to get group health insurance and what to consider before making your selection, we have answers for you. We have details on the regulatory requirements mandated by the Affordable Care Act (ACA), your cost investment as well as the options.
What’s Included in Coverage
If you offer health insurance that is Affordable Care Act (ACA) compliant, the ACA mandates 10 essential health benefits (EHBs), including:
- Ambulatory patient services (care 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
- 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 for dependents
Plans are available in four ACA metal tiers: Bronze, Silver, Gold, and Platinum. Each tier represents a different level of cost sharing for insured members, as shown below:
|ACA Metal Tier||Health Plan/Insurance Pays||Insured Pays|
AHIP, formerly known as America’s Health Insurance Plans, is the health insurance industry’s leading trade association, with members representing some of the country’s largest health insurers. AHIP reported in May 2020 that many of its members have expanded coverage to cover the cost of COVID-19 testing with no out-of-pocket expenses to members. If you are looking for specific health plan information, visit the AHIP web page and scroll down to the insurer that interests you most, or talk with your employee benefits agent.
For businesses subject to the ACA employer mandate (that affects employers with 50 or more full-time and full-time equivalent employees), in addition to offering coverage for the EHBs above, the cost to employees must be affordable. This is determined by whether the employee share of the premium for the lowest-priced, self-only coverage does not exceed 9.78% of the employee's household income for 2020. If the employee’s share of the cost does exceed this threshold, the employer must increase the employee’s subsidy to make coverage more affordable.
If you’re not sure how to calculate your group size to see if your business is an Applicable Large Employer (subject to the employer mandate), you can link here to use the Small Business Health Options Program (SHOP) calculator on the Healthcare.gov website. Alternatively, you can use the calculators on the CaliforniaChoice private health exchange website. (Just click on “ACA Calculators” in the lower-right corner of the home page.)
Available to Groups of Two or More
While a group health plan does require you to have a group, you don’t have to be a “large” group to qualify for coverage. Health plans and insurers will write groups with as few as two covered persons (a business owner and an employee). However, some carriers will not write a policy for a husband and wife group if both are owners of the business, or if it is a sole proprietorship. Other business types like an LLC, S-Corp, C-Corp, and Partnerships where the spouse is a W-2 employee are acceptable.
It does not matter whether you or your employees have pre-existing health conditions. Under the ACA, insurers cannot refuse to cover you or charge you more because of a pre-existing condition.
If you select CaliforniaChoice for your business, you choose your own contribution amount – a fixed dollar amount or a fixed percentage of the cost for a specific health plan. For example, you could choose 50% of the lowest-cost health plan in your area. Then your employees use the contribution you make toward their coverage to pay for whatever health plan they like best. If an employee chooses a plan with a premium that exceeds your Defined Contribution, he or she simply pays the difference.
The amount you select is locked-in for one year. At renewal, you have the flexibility to adjust your Defined Contribution, up or down, so you can lock-in the cost for another 12 months.
With CaliforniaChoice, you and your employees have access to more than 50 benefit plan designs through a single program. With Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Exclusive Provider Organization (EPO), and other coverage options available from eight different health plans, it’s easy for employees to find coverage that fits their health care needs and budget. They can choose from popular regional providers like Sutter Health Plus and Western Health Advantage in Northern and Central California, Oscar Health in Los Angeles and Orange counties, and Sharp Health Plan in San Diego. Statewide, your employees can choose from Anthem Blue Cross, Kaiser Permanente, Health Net, and UnitedHealthcare.
You can contribute – or not contribute – to the cost of coverage for your employee’s spouse and dependent children. The contribution you make just needs to be the same for all employees.
If your business doesn’t qualify for group coverage, you may be interested in pursuing individual health insurance; visit the Covered California public health insurance exchange for Individual & Family Plan (IFP) information.
Offering Benefits Helps Employees and Your Business
Employee benefits like health insurance is an advantage your employees and helps you stand out as an employer. According to multiple surveys by the Society for Human Resource Management (SHRM) and MetLife, employees are seeking a better work and benefits experience. That point has been emphasized as many Americans have faced unexpected health challenges in 2020.
Remember, the cost of employee health insurance is deductible as a routine business expense. Depending on your group size, average employee wage, and where you purchase your group health coverage, you may also qualify for a tax credit as outlined at Healthcare.gov.
How to Learn More
Many factors influence the cost of group health coverage: group size, ages of employees, the type of coverage offered, etc. The best way to find out what your potential cost would be for your group is to talk with an employee benefits broker. If you choose coverage from CaliforniaChoice, your representative will work with you to help you determine your Defined Contribution. If you don’t have a current insurance broker, we’ll help you find one who can provide a custom quote for your employees.