Small businesses in California will get help in providing affordable health insurance for employees through the Covered California SHOP (Small Business Health Options Program). The SHOP, a small business health insurance marketplace, will make it easier to offer employees a broad selection of health plans and coverage options usual only available to large employers. The SHOP will initially be limited to employers with fewer than 50 employees but will expand to accept larger groups later.
SHOP Plan Choices
Small-business owners, with 50 or fewer employees, may enroll in the Covered California SHOP plans when the health benefit exchange is launched on Oct. 1, for coverage effective Jan. 1, 2014. SHOP plans will bring a standardized set of benefits, good provider networks, a choice of insurers for employers and their employees, at competitive prices. Employers and employees will have a choice of 3 or 4 carriers depending in which of the 19 Pricing Regions they reside.
- Blue Shield of California
- Chinese Community Health Plan
- Health Net
- Kaiser Permanente
- Sharp Health Plan
- Western Health Advantage
While rates vary by regions, the Covered California SHOP premiums are generally comparable to 2013 small-group market rates and, in some cases, can save small businesses money on their premiums. The table belowlooks at average small group rates in select California metropolitan areas for the first quarter of 2013 and compares those figures to an average of the first, second, and third-lowest Silver plan for 2014 Covered California SHOP rates for the same areas. The average premium between equivalent plans shows that in these areas, premium costs have decreased by as much as 17 percent, except for one region.
Exclusive Site for Small Business Tax Credit
Small businesses with 25 or fewer employees and an average annual wage of less than $50,000 will be eligible to receive a 50% federal small-business tax credit for coverage purchased through the SHOP. An estimated 375,000 small employers in California qualify for the tax credit. To be eligible for the federal tax credits, small businesses must purchase coverage through Covered California’s SHOP.
Four Levels of Plans
Covered California offers small businesses four levels of health insurance plans — Platinum, Gold, Silver and Bronze. Small-business owners will be able to go online to shop and compare coverage options available for their employees. Certified Covered California insurance agents will assist employers in selecting an “anchor” plan through SHOP’s online marketplace. Employers can choose the coverage level that is the best fit, then select the anchor plan in that coverage level that suits their budget. Their employees can choose coverage under the anchor plan, or a different plan so long as it is in the same coverage level. If the employee chooses a more expensive plan, the employee absorbs the additional cost but still has flexibility and choice.