A quality group health insurance plan and employee benefits package is one of the key markers that differentiates companies that attract the best and those that don’t. Thanks to recent changes in the way that group health insurance and health savings accounts are administrated, the onus of providing a good health care option that will attract the best employees falls on employers.
For more information about small business health insurance plans, see this resource from the National Association of Health Underwriters.
Many California employers may be hesitant to offer a high-quality, comprehensive group health insurance option, largely because so much of that cost now falls on the business itself. In California, where it’s not easy or cheap to start and operate a business to begin with, this is an especially relevant concern.
At Taylor Benefits, we specialize in tackling this exact problem in a way that will appeal to businesses and employees alike. We offer a host of affordable group benefit provider networks and health small group insurance options with plenty of flexibility, all while being tailored to the precise needs of your business and its workers. Whether you have a small business with just a few employees, or a large company with more than 100, we will craft a workable and affordable plan that fits your needs.
Large companies are typically seeking ways to reduce the cost of their health insurance without sacrificing quality. One increasingly popular way for large businesses to accomplish that goal is self-insurance. With a self-funded insurance plan, the employer pays directly for health care services used by the workers. However, employers almost always use an insurer or a third-party administrator. Some large companies attest to savings obtained from the approach, combined with the ability to offer a customized coverage package. Consult your Taylor Benefits Insurance representative for details.
Another tool employers use to reduce their healthcare insurance expenses is cost-sharing with their employees. Many companies pay a portion of the premium charged for individuals and family dependents, with the employee responsible for the balance. In addition to the premium, workers typically have a deductible and often a co-payment or coinsurance to pay when they use their coverage. Deductibles have been increasing for all types of plans, with notable increases in enrollment in “high deductible” options. In most cases, the subscriber must satisfy the entire deductible amount before services are covered, except for preventative care. If the subscriber has a co-payment, that is typically a specific dollar amount. In contrast, a coinsurance payment is likely a percentage of the price charged.
When smaller employers implement self-funded insurance, as they are increasingly doing, they often employ a stop-loss component to limit their risk. This tactic is sometimes called level funding rather than self-funding since the company shares the risk with an insurer. The Kaiser Family Foundation survey reported a significant increase in level-funded insurance programs among small companies during 2021 compared to previous years.
However, the Kaiser survey uses a generous definition for small companies. Smaller businesses that don’t have to provide health care coverage may prefer to use the resources available to them from the Small Business Health Options Program (SHOP), which provides some coverage plans and tax credits for small employers that offer health insurance.
In California, employees have access to paid family leave benefits. However, the temporary disability program does not fully replace a worker’s income. Companies must also provide at least three days (24 hours) of paid sick leave per year, with accrual limited to 48 hours. In addition, the state requires other unpaid leaves for employees who need them.
California employers do not have to provide paid holidays or vacation time. However, if a company does offer paid vacation days and the employee does not use them, they must receive pay for earned but unused days when they leave that job. While some famous technology companies have made over-the-top benefits like yoga classes, free haircuts, onsite catering, and other perks a goal for many, these remain unusual. However, some companies in major metropolitan areas offer commuter assistance, such as subsidies for employee vanpools or public transportation. Many counties in California will assist with these arrangements in an effort to reduce traffic.
A good group health benefit will provide value not just to employees, but to business owners as well. For employees, a quality health plan generally provides preventive care and wellness programs, both of which are designed to incentivize workers to take a more active role in their own health and prevent undetected long-term health issues.
Good news for business owners and employees is that there are tax breaks to be had through the manner in which the plan is administrated. In most cases, the employers cost of providing health care is tax-deductible and there are options which extend this same benefit to workers. To get a full understanding of our most popular plan options and services in California, see the following list:
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The ACA provides some tax credits for companies with up to 25 workers that pay average wages of less than $50,000 annually. If your company qualifies, you may receive a tax credit.
California health insurance companies for individuals, families, and small businesses are listed below.
You can also check out Covered California, which provides a marketplace for health plan options in California. Individual employees as well as small business employers can buy insurance with subsidized premiums as a result of the ACA legislation. Get a quick overview of all small group plans at no additional cost.
Before Congress enacted the ACA, small companies could face hefty prices for insurance due to the insurer’s ability to consider the age of employees and other factors that might increase the cost. Now, that’s not allowed. The ACA also prohibited insurers from raising rates or denying coverage due to pre-existing medical conditions.
The ACA implemented metal tiers for gauging the value of each qualified plan. The categories are Bronze, Silver, Gold, and Platinum. For example, a Bronze level plan will have a lower premium but will also cover less of the total average cost for a subscriber. At the opposite end of the spectrum, a Platinum level plan will have a higher premium but will cover more of the service costs. Using ACA standards, a plan must cover at least 60 percent of anticipated costs.
Health insurance needs vary from person to person. Fortunately, small employers can choose a health plan that meets their employees’ needs and budgets. Many employers provide one medical insurance plan, such as a PPO or HMO. To satisfy the ACA requirements, the plan must at least be at the bronze level. In other cases, the employer may allow employees to choose between multiple plans based on their needs.
Here are brief answers to some frequently asked questions about California health insurance.
For organizations with more than 50 employees, large-group health insurance is an excellent option. Large group health insurance plans often come with the following benefits:
Small business owners can take advantage of several different kinds of health coverage.
The most common option for a small business is to choose a traditional group health insurance plan. Employers pay a predetermined premium, which they may share with employees in exchange for providing health benefits to their employees and potentially also their families.
Another great choice is a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). Using this program, employers can give their employees a set amount of money –the company decides the amount—to reimburse their employees who obtain qualified individual healthcare plans.
It is also possible to create a Group Coverage Health reimbursement plan. The company would provide group health insurance while offering a monthly allowance for deductibles, copays, and other expenses.
Self-funding is a potential path, but it is risky for small companies. With a self-funded program, the employer directly pays employees’ medical bills. The approach can save money, but the company will face exorbitant costs if one or more workers have a catastrophic claim.
Another avenue is to affiliate with an Associate Health Plan (AHP), which is a group health plan in which several smaller companies in a particular industry or location pool together to buy group health coverage. By raising the number of participants, each one may get a more attractive deal than they could negotiate independently.
The cost for an employer to provide health insurance depends on multiple factors. The larger the company is, the lower the per-person price is likely to be. However, large companies with over fifty employees must ensure that the employees’ share of the policy premium is not more than 9.12 percent of their income. That could result in the company paying a greater share.
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