Covered California for Small Business Health Options Program
SACRAMENTO, Calif. — Covered California announced today the rates and expansion plans for its small group health insurance exchange, Covered California for Small Business. The statewide weighted average rate increase is 5.9 percent, for employers and their employees beginning Jan. 1, 2017, which is down from the 7.2 percent increase in 2016.
“Covered California is building competitive insurance marketplaces that work for both individuals and for California’s small business market, bringing choice, stability and rate moderation to employers, their employees and the many consumers who don’t have employer-based coverage,” said Covered California Executive Director Peter V. Lee. “The options and rates announced today demonstrate that the marketplaces are working to keep insurance premiums under control, and they are giving consumers more choices than ever.”
Starting Jan. 1, Blue Shield of California will take its Full PPO plan statewide across all metal tiers with coverage available to employees working out-of-state. Blue Shield of California will also offer a new plan, Trio HMO Network, powered by a recent innovation in health care, the accountable care organization (ACO). Additionally, Kaiser Permanente will bring coverage to Santa Cruz County. Both expansions improve options for employers in rural parts of the state and expand access to the small business tax credit only available through Covered California for Small Business.
“The expansion of the small group market is allowing thousands of businesses to take advantage of the new control and choice now offered by Covered California for Small Business,” said Kirk Whelan, director of Individual and Small Business Outreach and Sales. “Employers can select up to two adjoining metal tiers and then set their contribution level at one tier or the other. Meanwhile, the employee — knowing the employer’s contribution level — has the flexibility to choose which of the two tiers fits best with the employee’s budget and needs.”
Whelan also noted that Covered California for Small Business operations are sound, with new employers being enrolled within three days of filing an application, and a year-over-year retention of almost 90 percent. There is also growing interest and participation among insurance agents certified to sell plans on the exchange.
“We’ve seen a near doubling since 2014 in the number of agents writing policies, with many agents continuing to enroll multiple groups throughout the year,” Whelan said.
Covered California for Small Business also announced the addition of Rogers Benefit Groups to the ranks of general agents working with the exchange. The company joins general agents Claremont Insurance Services, Dickerson Employee Benefits, LISI and Warner Pacific.
All six carriers participating in 2016 will return for 2017: Blue Shield of California, Chinese Community Health Plan, Health Net, Kaiser Permanente, Sharp Health Plan and Western Health Advantage.
Currently, more than 28,000 individuals have insurance through Covered California for Small Business, which makes it one of the largest Small Business Health Options Programs in the nation.
Lee pointed to the moderate rate change for Covered California for Small Business as another example of the benefits the Affordable Care Act is delivering for millions of Californians and Americans across the country.
“While some have focused on large potential increases in some parts of the country, there has been little attention paid to the fact that for the individual market, 2017 is a transition year,” Lee said. “It is important to remember how much of an impact the end of the temporary reinsurance program is having on rates, and the relatively low increase for small business helps focus attention on what stability can look like.”
The reinsurance program was designed to moderate rate increases during the first three years while exchanges were being established. The American Academy of Actuaries estimates the removal added up to seven percent to premiums for 2017.
“Take that one-time adjustment away and the rate changes for individual and small group marketplaces in California would be nearly identical,” Lee said. “We are building competitive markets where consumers win. Covered California brought choice to the individual market and now we’re doing it in the small business market.”
Businesses with up to 100 employees can apply for health insurance coverage for their workers through Covered California for Small Business. Federal tax credits may be available to employers providing insurance through Covered California for Small Business. Visit www.CoveredCA.com/forsmallbusiness/ for information on how to apply.
Family dental plans are optional and will be provided by Access Dental, Delta Dental, Liberty Dental, Dental Health Services, Premier Access Dental and California Dental Network.
About Covered California
Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California, in partnership with the California Department of Health Care Services, helps individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget.
Small businesses can purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits. Covered California is an independent part of the state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the Governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.