If you’re like most employers, the idea of offering a wider array of benefits to your employees is attractive. Makes sense, as your employees all have different needs, which inevitably leads them to different doctors, specialists, and hospitals.
Here’s the problem: Businesses with under 100 employees typically struggle to find the right method for offering multiple carriers. California Choice (the other multi-carrier option for small businesses in the state of California) is a popular option, but some employers may find Covered CA for Small Business (CCSB) to be better suited to your employee’s needs, and your company’s financial picture.
Here’s a breakdown of the SHOP, and some reasons why it could be a good fit for your company:
First, what is Covered CA for Small Business?
Covered CA for Small Business (CCSB) is an “exchange”, where employers can access multiple plans, from multiple carriers, while side-stepping some other limitations enforced on most group health insurance plans available today. The term “exchange”, simply refers to a marketplace where carriers can offer their plans to be purchased by employers.
Who can enroll?
According to the Covered CA website, at the time of this writing, your business is eligible to enroll through the SHOP if:
- you have between 1 and 100 eligible employees
- at least one of your employees receives a W2
- most of your eligible employees reside in the state of California
If you’re currently considering whether or not to offer benefits, click here to access the Healthcare.gov calculator. Following the ACA’s employer mandate, if you have 50 or more employees, it may be required that you offer benefits.
How does my company qualify for tax credits with CCSB?
If you employ less than 25 full-time employees, at an average wage of less than $50,000 per year, and you cover at least 50% of your employee’s premium costs, you could qualify for a tax credit. Click here to access the SHOP tax credit calculator to see if you qualify.
Beyond carrier choice, and the possibility of a tax credit, Covered CA for Small Business (CCSB) offers many other benefits besides those outlined above, including:
- Multiple carriers offered at rates equal to going direct with the carrier
- One bill
- No mandatory pediatric dental added to your plans
- Allows you to not offer spouse and dependent coverage, and allows them to collect subsidies for individual coverage purchased through Covered California’s individual marketplace
What to know before you enroll:
At the time of this writing, SHOP carriers include Blue Shield, Kaiser Permanente, Health Net, Sharp, and Western Health Advantage. Click here for a complete plan comparison grid.
The SHOP allows you to offer “2 conjoined tiers” to your employees. Here’s what this means: Plans, which range from Bronze, Silver, Gold, and Platinum, must be purchased in pairs. The possible pairs are: Bronze/Silver, Silver/Gold, and Gold/Platinum.
Just like with other carriers, you’ll want to choose a plan, or an amount, to contribute towards the cost of your employee’s coverage. As an example, you could choose to offer plans in the silver/gold range. You’d then pick a plan in either tier to contribute towards. This could be 75% of the Kaiser Silver HMO, for example. Your employees can then decide if they’d like to stay with Kaiser, choose another carrier, or even “buy up” to a plan on the Gold tier. This way your employees are getting the plans and coverage levels they need, and you are limiting your expenses.
Enrolling in the Covered California SHOP:
Enrolling is actually quite easy, and most companies are eligible to enroll at any point during the year, provided the application is filled out, and employee elections are gathered.
In addition to the strategy behind implementing the plans brokers, like Campfire Health, facilitate the purchase, and enrollment of these plans.
Photo credit: kazu end