Handling Renewal Cost Increases

Take this scenario: you’re a business owner, and the annual renewal for the health insurance you offer to your employees is approaching. You receive a letter in the mail stating that your health insurance prices are increasing by 30, 40, or even 50%. The situation described above has become a common occurrence in 2014, and business owners throughout California have been looking for ways to solve this problem. I’m here to explain to you how the most savvy business owners have been able to continue to offer health coverage to themselves, their families, and their employees without breaking the bank. I will explain exactly why below, but for the sake of simplicity, there are three easy words that are the secret to solving the booming increases in health insurance costs: Use an Agent. It may seem simple, but so many business owners do not take advantage of this drastically helpful service. In some realms of industry, agents and brokers come with a negative connotation, but in the California health insurance world agents and brokers are nothing but beneficial to their clients. Let me explain why. First of all, AN AGENT DOESN’T COST ANYTHING. Some people have a hard time wrapping their head around this; of course, agents DO get paid for their work, but they are NOT paid by their clients. They are paid directly by the insurance company. And since insurance premiums are fixed by law in California, the price of going direct to the carrier is the same as going to an agent. This all boils down to the fact the businesses pay nothing extra to use...

Covered CA Small Group U/W

*This list is meant to be informative and is not intended to be all-inclusive. Other policies and guidelines may apply. Covered California Small Group (SHOP) Underwriting Guidelines GROUP SIZE: 1-50 eligible employees RATE GUARANTEE: 12 months RATES: Rates are based on three factors: 1) age, 2) employee ZIP Code, and 3) family composition. There is a single age band for ages 0-20 and ages 64+. All other ages have their own, individual age band. Employee and spouse are rated separately based on age. Child dependents are rated separately based on age. Child dependents are rated separately for the first three children for ages 0-20. The fourth child and up in this age band are not rated. Child dependents ages 21-25 are rated individually. Family rates are the sum of all of the individual rates. FEES: There are no additional employer or employee fees in SHOP. CONTRIBUTION: Employers first select the metal tier (Platinum, Gold, Silver, or Bronze) they want to offer their employees. Then, within that metal tier, they select an anchor plan they wish to tie their contribution to. SHOP will offer a % of selected anchor plan contribution scenario, applied to employee and dependent coverage when offered to dependents. Employers are required to contribute a minimum of 50% of the employee-only premium of that anchor plan for each employee electing coverage. Note that the amount of the contribution will vary by the age of the employee and any dependent contributions being offered. There is no requirement to contribute to dependent coverage. When the employer contributes 100% of the employee premium for the anchor plan, 100% of the employees must enroll. PARTICIPATION: There is a 70% minimum participation requirement. Valid waivers are...

Employer Health Insurance Requirements

   Small Business (1 – 50) No health insurance requirements through 2016 Mid-Sized Company (50 – 99) No requirements in 2015 2016: Must offer minimum essential coverage to at least 95% of full time employees or be subject to a potential $2,000 per employee penalty (minus 1st 30 FT employees) More specific details regarding the penalty can be found here Business (100+) 2015: Must offer minimum essential coverage to at least 70% of full time employees 2015: Anticipated penalty is $2,000 per full time employee (minus the 1st 80 FT employees) 2016: Must offer minimum essential coverage to at least 95% of full time employees 2016: Anticipated penalty is $2,000 per full time employee (minus the 1st 30 FT employees) More specific details regarding the penalty can be...

Blue Shield Reduces Participation

From May 1, 2014 through July 1, 2014, Blue Shield of California is relaxing the participation requirement for groups with five or more enrolled employees to 25%. This is less than Blue Shield’s already low requirement of 65%, and among the lowest in the industry. Although most businesses often want to purchase two plans – an HMO from one carrier and a PPO from another – relatively smaller businesses typically can’t meet minimum participation requirements. This limited-time promotion lets your clients purchase a PPO plan from Blue Shield alongside another carrier’s HMO. With the relaxed participation requirement, you can deliver to your clients what they want – flexibility and choice. The relaxed participation requirements are available for new medical small business clients with effective dates of May 1, 2014 through July 1, 2014*. The promotion applies to off-exchange plans only. New groups with fewer than five employees enrolling with Blue Shield do not qualify. Groups must meet the definition of a qualified small employer group. All normal eligibility and enrollment documents are required. Refusals are required for all eligible employees not enrolling in the Blue Shield plan(s). Be on the lookout for information about our specialty products promotion coming soon. *Blue Shield reserves the right to cancel this program at any...

California SHOP News and Notes

Courtesy of Health Net Pulse: Several provisions of the Affordable Care Act (ACA) affect small businesses, their employees, and families. Currently, smaller businesses are less likely to offer health insurance coverage to their employees than larger companies: 57% of small businesses with 50 or fewer workers offered health benefits to employees in 2011, compared to 92% of businesses with 51 to 100 workers, and 97% of businesses with 101 or more workers. Who is eligible? Beginning in 2014, small employers (up to 50 employees/100 beginning in 2016) can apply to participate in SHOP. Employer groups can enter SHOP at any time SHOP-participating employers must make coverage available to all full-time employees Small Employer Group tax credit eligibility Tax credit for small employers who provide coverage through SHOP (available for 2-year period) Must have 25 or fewer employees Average employee wages must be under $50,000 Employer must contribute at least 50% toward the premium The SHOP Enrollment Process Employer Enrollment Can enroll any time during the year The SHOP can establish minimum participation standards and can limit enrollment of plans that do not meet these standards to Nov. 15–Dec. 15 of each year (in SHOP, the exchange establishes its rules) Employee Open Enrollment Yearly open enrollment period, based on the plan year, as usual Special Enrollment Employees who have certain qualifying events occur (e.g., birth, death of spouse, loss of job) will have a special enrollment period that lasts 30 days from date of qualifying...
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