Eight Things A CA Business Needs to Know About Group Health Insurance

Saturday, March 16, 2024 16:58 Posted by Admin

When designing a group health insurance plan for any business, there are many popular features, a few pitfalls, and some tips on what’s important to know about group health insurance.

There are also several unique things to consider that California companies need to know about California group health insurance. Let’s explore the ins and outs of group health care plans, eight key things you need to know about group health insurance, and its potential impact on your business in the Golden State.

What Health Insurance Is Mandatory in California?

Having health insurance in California isn’t just a bright idea. It’s the law! 2020 marked the first year California residents were required by state law to be covered by health insurance, also called the “individual mandate.”

California Gov. Gavin Newsom signed the Individual Mandate into law in 2019 and made it effective starting in 2020. The new law ensured more affordable healthcare for more CA residents by:

• providing financial subsidies for 2.5 million residents
• ensuring a lower income threshold than federal mandates
• capping health insurance premiums at 8.5% regardless of income
• setting fines of $800 for individuals – $400 for each uninsured child and up to $2,400 for families breaking the new health insurance law.

This was a natural follow-up of The Patient Protection and Affordable Care Act, also known as Obamacare and passed in 2010. Obamacare was essential in making health care more accessible across the US. Since 2014, citizens can no longer be denied healthcare or be charged more for pre-existing conditions. They must also carry basic health insurance or face legal penalties.

Why the Individual Mandate Matters for Businesses

California became the first US state to provide financial assistance to lower and middle-income residents in addition to federal subsidies, helping citizens to maintain access to affordable healthcare.

The new health insurance law should mean lower overall costs for health insurance, fewer uninsured patient treatment problems, and laws and penalties to ensure compliance—all good news for employers who may offer health insurance as an option for employees.

What Do Employees Want Most in Health Insurance?

Recent research by Fractl tells us what employees want and value most in their large group health insurance. These preferences include better health, dental and vision care (88%), more flexible hours (88%), more vacation time (80%), work from home options (80%), unlimited vacation (68%), student loan assistance (48%), tuition help (44%), paid maternity/paternity leave (42%) and free daycare (38%).

This is a long list of “wants.” Still, it is worth considering the changing needs of employees in response to the pandemic and the cost and healthcare implications as more employees work from home.

We recommend you review how your current plan compares, what your competitors offer, and which additions would make your group health insurance even more popular with employees and an ongoing business asset.

Eight Things a California Business Know About Group Health Insurance

In wrapping up our look at what’s unique about group health insurance in California, here’s a checklist of eight things every California business needs to know about group health insurance after the wrapup of the 2021 CA legislative session. These features apply to companies with group health insurance plans for more than 100 employees.

1. CA defines “large” groups as employers with more than 100 employees.
2. It’s mandatory. CA residents must carry health insurance or risk fines and penalties. That affects employer-sponsored group health plans.
3. After July 1, 2022, according to SB 280, companies must cover “basic healthcare services,” including:
   • Physician services, including consultation and referral.
   • Hospital inpatient services and ambulatory care services.
   • Diagnostic laboratory and therapeutic radiologic services.
   • Home health services.
   • Preventive health services.
   • Emergency health care services, including ambulance and ambulance transport services and out-of-area coverage.
   • Hospice care.
4. Companies can be fined up to $2,100 for first-time offenses and $5,000 for each additional contravention of the new regulations.
5. Covid testing and vaccine coverage must be covered.
6. Groups need to enroll 75% of eligible people and pay 50% of employee premiums with a minimum of one employee (excluding spouses). Part-time employee coverage is optional.
7. Four group health insurance plans are now standardized: Bronze, Silver, Gold, and Platinum, each with varying costs, features, limits and deductibles.
8. The majority (51%) of employees must be located in California. Out-of-state coverage adds complexity, and some carriers may not cover out-of-state services.

California’s Special Group Health Insurance Requirements

As you can see, CA group health insurance plans have some unique requirements and challenges for business. We can help you navigate through the maze of regulations, taxes, subsidies, the best available group health insurance plans, and how to minimize the cost and potential negative impacts on your CA business. We’re Taylor Benefits, and we know our way around California group health insurance.