Since the passage of the Affordable Care Act (ACA) in 2010, business owners can no longer be denied the right to purchase health insurance coverage because of the size of their company.
Small business owners in California have a number of options when looking to offer and provide health insurance plans for their employees. Among these is the state’s health exchange, known as Covered California.
Understanding Covered California
One of the results of the creation of the health exchange. According to HealthCare.gov, this is another term for the Health Insurance Marketplace, a service available in every state that helps individuals, families, and small businesses shop for and enroll in affordable medical insurance.
HealthForCalifornia.com offers this definition,
“The Covered California Health Exchange is the government agency offering subsidized Obamacare plans for this state. The California Health Exchange was created to assist citizens and legal residents with applying for marketplace coverage in order to comply with the Affordable Care Act (ACA). When the law was passed in 2010, each of the 50 states had to decide to either create a state-run health insurance exchange or offer enrollment through a federally-operated exchange. This state chose to create their own exchange and called it ‘Covered California’.”
Covered California, California’s public health insurance exchange, offers individuals and families access to multiple health insurance carriers and Advanced Premium Tax Credits that can be applied towards their monthly premiums. These tax credits offer potential savings that can be substantial.
Looking at Covered California Plans
There are currently three primary health care providers that work with Covered California: Kaiser Permanente, Blue Shield of California and Health Net. In addition, there are limited regions (Los Angeles County East and West, Orange County and parts of San Diego County) that have access to Oscar and Sharp Health Plan.
The breakdown of plans and networks for small business follows the familiar metals categories:
- Bronze 60%
- Silver 70%
- Gold 80%
- Platinum 90%
The Covered California website offers a brief explanation of the coverage basics:
- Most health insurance newly sold to small businesses must now be classified as one of four levels of coverage: Bronze, Silver, Gold or Platinum.
- All health insurance plans offered in the individual and small-group markets must provide a comprehensive package of items and services, known as essential health benefits.
- All Covered California health insurance plans offer embedded pediatric dental coverage. This means that dental insurance for children is included in the price of all health plans purchased in the exchange.
Types of Plans
The three plan types offered through Covered California carriers are Preferred Provider Organizations (PPO), Health Maintenance Organizations (HMO), and Exclusive Provider Organizations (EPO).
Here is a brief explanation of each:
PPO plans encourage members to use their network of preferred doctors and hospitals. Unlike with HMOs, members are not usually required to choose a primary care physician (PCP) but can choose to see any doctor or specialist within their network.
Members have an annual deductible they’ll be required to meet before coverage begins for their medical bills. In addition, there is also a copayment for certain services.
With an HMO plan, members usually have lower out-of-pocket expenses but also have fewer options for choices of PCP or hospitals than with other plans. Visits to specialists require members to obtain a referral from their PCP.
HMO coverage is generally provided for a wider range of preventative services than other plans. While members typically have a copayment for services, they may not be required to pay a deductible before their coverage starts.
EPO plans are similar to HMO plans because they have a network of physicians their members are required to use except in the case of emergency. Employee members will also have a PCP who will provide referrals to in-network specialists. There is typically a lower premium than that of a PPO offered by the same insurer.
With an EPO, you may have limited choices for your health care providers although likely more than through an HMO. Depending on the plan provider, you may not have to get to see a specialist.
Carrier Plan Types Offered
Within these broad categories, the three predominant carriers provide just two types of plans: PPO and HMO. Here is an overview of their offerings:
- Blue Shield of California offers PPO plans for all four levels in Full PPO networks and HMO plans in a Trio HMO network for all but the Bronze level.
- Health Net only provides PPO plans in their HN Full PPO networks for all four levels, and PPO plans through an EnhancedCare PPO network for both the Bronze and Silver levels.
- Kaiser Permanente is an integrated managed care consortium, based in California, that offers its own HMO with its own full network.
- For the select regions noted earlier, Oscar offers an EPO plan within their full network, while Sharp Health Plan, a commercial not-for-profit health plan based in and operating in San Diego, has their own HMO plan with two levels of networks – HMO Premier and HMO Performance.
Help With Covered California Health Care Plans
There is no “one size fits all” health plan, especially for small businesses, which is why it is critical to ask questions and research your options.
As a qualified insurance agent, JC Lewis Insurance Services can help you choose a plan that provides the benefits and coverage your employees need. In addition, we can help you navigate the basics of group health care insurance coverage and explain how an agent can help you save money.
There are a number of resources to help you learn about health insurance plans in California such as the California Department of Insurance and Healthcare.gov, along with seeking out resources from a good agent like JC Lewis Insurance Services.