Running a business is a challenging endeavor. And running a large commercial enterprise with dozens or even hundreds of employees is often far more than one owner can manage alone.
However, despite what non-business owners may think, managing and growing a small business with only a handful of employees is a complex and often stressful undertaking in itself. And, as many small business owners are aware, doing business in states such as California can seem a bit more complicated.
One survey, for example, ranked states according to “how friendly” their state government is in regard to various regulations such as licensing, zoning, hiring, paying taxes, and health, safety, and environmental requirements. California, Rhode Island, and Illinois failed, receiving an F, according to survey respondents of small business owners.
Other considerations play into this perception, as well.
In fact, based on certain “business friendly” factors, California has been ranked as number 48 out of all 50 states in terms of its business tax climate, according to the Tax Foundation’s State Tax Index for 2022. Only New York and New Jersey ranked lower.
All this points to the fact that, while California remains one of the largest regions for providing small business opportunities, managing one requires help.
And that includes finding the right health insurance offerings for your business.
CALIFORNIA HEALTH INSURANCE FOR SMALL BUSINESS OWNERS
When it comes to finding and choosing the right California health insurance plans for you and your employees, the options can be a bit overwhelming.
Health Insurance, along with vision insurance and good dental insurance, are considered high-priority employee benefits, especially in California. Finding quality employees is one of the challenges facing every business owner and offering quality employee benefits is one of the key elements for providing compelling offers to prospects.
But navigating your options from the top health insurance companies offering California health insurance can be difficult, time-consuming, and even a bit overwhelming. This is especially true for first-time business owners and those who have few employees are fully engaged in the day-to-day operations themselves.
And there are a multitude of questions that need to be addressed, as well.
HSA VS PPO: WHAT’S THE DIFFERENCE?
A common question that comes up for owners concerns the distinctions between typical acronyms used in the medical insurance industry.
For example, we talk of HMOs quite often. This is simply what is known as a Health Maintenance Organization. In California, Kaiser Permanente is the largest HMO in the state.
According to Healthcare.gov, an HMO is type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency.
HSA
Another question concerns the difference between an HSA and PPO.
An HSA, or Health Savings Account, is not a health plan but a type of savings account that allows one to set aside money on a pre-tax basis to use for qualified medical expenses. These untaxed dollars can be used to pay for deductibles, copayments, coinsurance, and some other expenses. HSA funds typically cannot be used to pay premiums, however.
An individual can only contribute to an HSA if that person also has a High Deductible Health Plan (HDHP). This is a health insurance plan that typically only covers preventive services before the deductible. While not as common as HMO or PPO plans, an HDHP provides a lower-cost health insurance option that can allow a member to pay less for health insurance.
PPO
A PPO stands for Preferred Provider Organization. Similar in many ways to HMOs, they do not, however, require members to choose a primary care provider, or PCP. This means members can choose to see any doctor or specialist within their network although they are encouraged to use doctors and hospitals within the PPO’s preferred network.
Much like an HMO, members pay a yearly deductible before the PPO starts to pay some or all of their bills. members pay a percentage of a bill, often referred to as co-insurance, for covered services, while the PPO pays the balance.
You can see the doctor or specialist you’d like without having to see a PCP first.
You can see a doctor or go to a hospital outside the network, and you may be covered. However, your benefits will be better if you stay in the PPO network.
Premiums tend to be higher, and it’s common for there to be a deductible.
LET US BE YOUR LOCAL PARTNERS FOR CALIFORNIA HEALTH INSURANCE
J.C. Lewis Insurance is a long-time, family-owned firm of expert brokers based in Sonoma County. Our mission has always been to provide expert advice and assistance to small business owners throughout Northern California when it comes to group health insurance and group medical plans.
At J.C. Lewis, we only offer California health insurance plans from the top health insurance companies that are licensed to do business in California. And we are licensed and certified by each of these insurance carriers to offer coverage to individuals, families, and small group employers.
In addition to these services, we help with Medicare supplemental and prescription drug plans for seniors.
If you are self-employed, or your employer doesn’t provide health benefits, then an individual or family plan can be the best option for you, or you and your family.
When you’re shopping for medical insurance, you are likely to have several questions and concerns. That’s great because we welcome your questions about health coverage insurance and you can be confident that J.C. Lewis Insurance Services will help you find the right solution.
Frequently Asked Questions
What health insurance options are available for small business owners in California?
California offers a variety of health insurance options for small business owners. Common plans include HMOs, PPOs, and High Deductible Health Plans (HDHPs), which can be paired with Health Savings Accounts (HSAs). Each type offers different coverage and pricing models. Employers should also consider offering vision and dental insurance, as these are popular employee benefits that attract quality talent.
How does California rank in terms of business-friendliness, especially with healthcare regulations?
California ranks low in business-friendliness, specifically in terms of healthcare regulations and tax climate. According to the Tax Foundation’s 2022 State Tax Index, California was ranked 48th for its business tax environment. Health insurance regulations can be complex, making it crucial for business owners to seek expert advice when choosing plans.
What is the difference between an HMO and PPO for California businesses?
The main difference between an HMO (Health Maintenance Organization) and a PPO (Preferred Provider Organization) is flexibility. HMOs require you to choose a primary care physician and get referrals for specialists, while PPOs allow you to see any doctor within the network without a referral. However, PPOs tend to have higher premiums and deductibles.
Why should small business owners offer health insurance to their employees?
Offering health insurance boosts employee retention and satisfaction. Studies show that 78% of employees consider health insurance as the top benefit when choosing or staying with an employer. In California, where hiring is competitive, health insurance is a key factor in attracting and retaining skilled workers.
What are the tax benefits of offering health insurance for small businesses in California?
Small business owners can qualify for tax credits when they offer health insurance. Under the Small Business Health Care Tax Credit, businesses with fewer than 25 full-time employees earning average wages below $50,000 may receive a tax credit of up to 50% of premium costs.
What is an HSA and how does it work with HDHPs?
An HSA (Health Savings Account) is a tax-advantaged account used with High Deductible Health Plans (HDHPs). Employees can contribute pre-tax dollars to pay for qualified medical expenses, including deductibles and co-pays. Unlike Flexible Spending Accounts (FSAs), HSA funds roll over each year and can grow over time.
Can small business owners offer dental and vision insurance in California?
Yes, dental and vision insurance are valuable additions to health benefits packages for small businesses. These benefits improve employee morale and wellness. In California, adding dental and vision plans is often affordable and helps businesses stand out in the competitive job market.
What is the minimum employee requirement for group health insurance in California?
In California, you generally need at least one eligible employee who is not the owner or the owner’s spouse to qualify for group health insurance. However, sole proprietors and self-employed individuals can purchase individual health plans.
Are small business owners in California required to offer health insurance?
California does not require small businesses with fewer than 50 full-time employees to offer health insurance. However, businesses with 50 or more employees must comply with the Affordable Care Act (ACA), which mandates coverage or face penalties.
What are the penalties for not offering health insurance under the ACA in California?
If a business with 50 or more employees fails to offer affordable health insurance under the ACA, they may face penalties of $2,570 per full-time employee annually. This is known as the employer mandate penalty, and it applies to employers who do not meet the minimum essential coverage requirement.
