Small Business and Group Health Insurance California
Employer Group Coverage
Here are the things you need to be aware of and understand:
Employer Group Coverage
It’s common for employers or employee associations to provide health insurance benefits to their employees. In fact, the Affordable Care Act mandates that employers with more than 50 full-time equivalent employees offer health coverage that meets certain minimum requirements. Even smaller employers may offer insurance options.
Employer-sponsored health insurance is typically chosen and purchased by your employer and is made available to eligible employees and their dependents. Employer-sponsored insurance is usually a group plan that covers a group of employees under a single policy provided by their employer. On the other hand, we offer individual insurance policies that are purchased by individuals or families for their personal coverage.
Benefits of an Employer-Sponsored Plan:
- Your employer takes care of selecting the plan options, saving you time and effort.
- Your employer often shares the cost of premiums with you, making the plan more affordable.
- Your portion of the premium is conveniently deducted from your paycheck each pay period.
- Contributions from your employer are tax-free, and your contributions can be made pre-tax, reducing your taxable income.
- Your employer offers policy documents and is available to answer any questions you may have about your plan.
COBRA
Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), employers with group health insurance plans are required to provide their employees the option to maintain their health coverage under their employer’s plan even if they have been laid off, terminated, or experienced another change in employment status.
When employers provide health coverage to their employees, they typically cover a portion of the monthly premium, while the employee covers the remaining cost. In the event that an employee loses their job, COBRA allows them to continue participating in the employer’s group health plan, although at the full cost of the premium (without any employer contribution) and with an additional administrative fee.
If your employer provides COBRA coverage upon leaving, you have choices:
- Continue COBRA coverage if you want to keep your current plan and doctors during medical treatment.
- Apply for special enrollment through Covered California if you don’t want COBRA. You have 60 days before and after your current coverage ends to apply for a plan. If you miss this period, you have to wait for the next open-enrollment period.
- Get coverage from another source like the individual market or your spouse’s employer plan.
To qualify for your small business, you must meet the following criteria:
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Have at least one W-2 employee, in addition to any owners, officers, or their spouses.
Possess a Federal Employer Identification Number (FEIN).
Maintain payroll records.
Options of the Group Health Plans
Employees have the option to choose from four different plan combinations.
- 4 Metal tiers: Bronze, Silver, Gold, Platinum
- 3 Metal tiers: Bronze, Silver, Gold OR Silver, Gold, Platinum
- 2 Metal tiers: Bronze, Silver OR Silver, Gold OR Gold, Platinum
- 1 Metal tier: Bronze OR Silver OR Gold OR Platinum
