latimes.com/business/la-fi-insure-small-business-20130802,0,2637620.story
Health insurance rates for California's small businesses unveiled
By Marc Lifsher
8:05 PM PDT, August 1, 2013 - Los Angeles Times
SACRAMENTO — California's small businesses next year will have a range of
competitively priced options offered by a new state government health insurance
exchange.
The agency, Covered California, unveiled its portfolio of policy options for
smaller businesses Thursday. They include both health maintenance organizations
and preferred provider networks and will be available in all parts of the state
as of Jan. 1.
Rates in most of the state's populous counties are expected to be
significantly below premiums now charged by insurers for similar plans. Average
premiums for a 40-year-old employee are slated to fall 17% in southern Los
Angeles County and 13% in the northern part. Rates for younger and older workers
are expected to drop proportionally, Covered California said.
An important element of President Obama's Affordable Care Act, these
small-business exchange policies will take effect Jan. 1. Insurance companies
will continue to offer small-business policies apart from the exchange.
Giving small-business owners new options to help their employees is crucial
in California, healthcare advocates argue. According to the California
Healthcare Foundation, the state has more than 7 million people under the age of
65 who don't have health insurance. Statewide, 25% of workers are not insured.
That rises to 40% at companies with fewer than 10 people.
"This adds competition to the marketplace," said Scott Hauge, a San Francisco
insurance broker and president of Small Business California, which advocates for
half a million employers around the state. "The exchange clearly will be a major
competitor."
Businesses with fewer than 50 employees can take advantage of the buying
power of the exchange's new Small Business Health Options Program. However, they
are not required to do so under the federal Patient Protection and Affordable
Care Act.
Small businesses with fewer than 25 full-time workers that purchase the
state-backed coverage could further lower their costs by qualifying for a
federal tax credit of as much as 50% of total employer-paid premiums.
Individuals not covered by employer or government programs will be subject to
financial penalties if they don't get insurance.
Participating insurance companies include Blue Shield of California, Chinese
Community Health Plan, Health Net, Kaiser Permanente, Sharp Health Plan and
Western Health Advantage. Each provider will offer four tiers of benefits dubbed
Platinum for the most comprehensive, followed by Gold, Silver and Bronze.
Employers will pick the level of coverage they want. Employees would still be
free to choose among all the locally available products within that category,
even if they are from different insurance companies. Prices and benefits can
vary from insurer to insurer, even if they are in the same category.
Not participating in the small-business exchange is Anthem Blue Cross, the
largest for-profit health insurer in the state.
California has aggressively prepared to put into place Obama's signature
Affordable Care Act — informally known as Obamacare — since he signed it into
law in 2010. Earlier this year, the administration of Gov. Jerry Brown made
public its programs for covering individuals.
The latest offering should be a boost for small businesses because it will
put them "on par with larger employers in terms of benefits," said Peter V. Lee,
executive director of Covered California.
"Employer-sponsored health coverage," he said, "has historically played an
important role in insuring Californians. Our launch of a full-choice,
small-group market is a testament to the state's commitment to build on the
critical role of employer-based coverage."
Although Covered California gives small employers a range of options to
attract and keep employees, it might not be the best deal for all companies,
especially those that operate on slim profit margins, said John Arensmeyer,
founder and chief executive of Small Business Majority, a national lobbying
group based in San Francisco Bay Area.
"They may sit down and do calculations and there may be situations where it's
better for the employees to go to the individual exchange and get subsidies,"
Arensmeyer said. But, what's important, he stressed, is that either way the
workers will have health insurance that they couldn't previously get.
marc.lifsher@latimes.com
Copyright © 2013, Los Angeles Times