CHA News Article

Covered California Announces Health Insurance Plans for Small Businesses

Covered California has announced the insurance carriers and rates for its small-group market, the Small Business Health Options Program (SHOP). Covered California will offer health insurance options to small businesses from six carriers:

  • Blue Shield of California
  • Chinese Community Health Plan
  • Health Net
  • Kaiser Permanente
  • Sharp Health Plan
  • Western Health Advantage

The plans, a mix of health maintenance organizations (HMOs) and preferred provider organizations (PPOs), will be sold through licensed agents who are trained and certified by Covered California.

Through the SHOP, California businesses with 50 or fewer employees will be able to choose from competitively priced, quality health insurance plans similar to those usually only available to larger employers. Small businesses are not required to enroll in Covered California’s SHOP, and there is no penalty for not participating or not providing health insurance to their employees. However, Covered California SHOP health plans will offer expanded choices, online tools for shopping and enrollment, and streamlined invoicing. Small businesses are eligible for a federal health care tax credit if they have fewer than 25 full-time-equivalent employees for the tax year, pay employees an average of less than $50,000 per year and contribute at least 50 percent of their employees’ premium cost. Employers with 10 or fewer full-time-equivalent employees with wages averaging $25,000 or less per year are eligible for the maximum amount of tax credits. To be eligible for the federal tax credits, small businesses must purchase coverage through Covered California’s SHOP.

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 that will begin Jan. 1, 2014. Initially, Covered California will serve businesses that have one to 50 eligible employees. Starting in October 2015, Covered California will enroll businesses with no more than 100 full-time equivalent employees for coverage that begins in January 2016. Beginning in 2017, states will be allowed to open up their exchanges to larger employers.

According to Covered California, the SHOP premiums are generally comparable to 2013 small-group market rates.