Choice Stories

November 16, 2022

What Is a Health Insurance Marketplace?

You may have heard the term health insurance marketplace and questioned what it refers to. It actually has multiple meanings. Broadly, it refers to the entirety of the health insurance market. That includes all types of plans: individual, family, and employer-sponsored coverage.

It also refers to the federally facilitated marketplace (FFM) exchanges. These were created by the Affordable Care Act (ACA). That includes 18 state-based marketplaces and three states using the federal exchange platform. Thirty states use the FFM exchange.

California is one of the state-based marketplaces. The state’s exchange is Covered California. It’s available for Individual Family Plan (IFP) coverage. Covered California for Small Business offers coverage to employers with 1 to 100 employees.

Individuals buying IFP coverage through an FFM or state exchange may be eligible for premium subsidies. These help reduce out-of-pocket costs. As part of the American Rescue Plan Act and Inflation Reduction Act, IFP subsidies have increased. Through 2025, there is no longer a cut-off on individuals’ income at 400% of the federal poverty level. However, exchange subsidies are not available to those who get their insurance through their employers.

Employer Coverage Options

While employers are not able to take advantage of ACA premium subsidies, there are other coverage avenues available. One is purchasing coverage directly through an insurance company. Another is shopping for coverage through a broker. A third is buying coverage through a public or private exchange, with or without a broker.

Where Covered California for Small Business is a public exchange for health insurance coverage, CaliforniaChoice is a private exchange. Both the public and private exchanges offer coverage from multiple health plans. Covered California for Small Business offers five health plans and CaliforniaChoice includes eight in its program.

CaliforniaChoice began in 1996 based on the principle that small businesses should be able to choose from a variety of employee health insurance options. For 2023, CaliforniaChoice members can choose from 130+ HMO, PPO, EPO, and HSA-qualified plan options. That’s 20 more than in 2022. There are also two added networks – for a total of 20.

Plus, CaliforniaChoice delivers value-added benefits. Among the no-extra-charge benefits are online HR support and Cal-COBRA or COBRA billing. You and your employees also get Flexible Spending Accounts (FSAs) and Premium Only Plans (POPs). Discounted Dental, Vision, and Hearing services are available, too. Plus, there are discounts on wellness products, fitness, and savings on entertainment, travel, and more.

Talk With a Broker to Learn More

If you want to find out more about the health insurance marketplace, a good place to start is by talking with a health insurance broker. Your broker can share information about your employee benefits options and the plans available in your area. If you don’t already have a broker, you can search for one here.

Your Beginner's Guide to Choosing a Small Business Employee Benefits Program

Do you need help choosing the right health benefits for your employees?
This guide can help!