In 2010 California created the nation’s first Affordable Insurance Marketplace under the Affordable Care Act called Covered California. Covered California helps individuals and small businesses to compare health plans, get answers to questions, find out if they are eligible for tax credits for private insurance or health programs and enroll in a health plan that meets their needs. For small employers, Covered California’s insurance exchange aims to level the playing field and offer better choices at lower costs.
Covered California makes health care easier and faster
Covered California has two separate programs: the Individual Marketplace and Covered California for Small Business (formerly known as SHOP). Think of the SHOP as a hub that aggregates plans and acts as your advocate and negotiator with insurance companies. It organizes qualified California small business health plans, gets information on their prices and benefits, enrolls your employees and consolidates billing. Employers choose how much of the share of the premium to pay and can offer plans from several insurance companies while receiving a single bill and writing a single check.
SHOP currently serves businesses with 2-50 employees. In 2017 all employers with 100 or fewer employees may join. States may allow businesses with more than 100 employees to participate after 2017.
More Advantages of the Covered California Health Insurance Exchange:
It qualifies health plans offering coverage through it – (certifying, recertifying and decertifying).
It rates each plan offered through it on the basis of relative quality and price.
It standardizes consumer information on qualified health plans.
It provides an electronic calculator so businesses can determine the cost of coverage after applying for premium tax credits and cost-sharing reductions.
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Small businesses are able to band together to create a large purchasing pool that gives small business owners the same clout and protections that large employers have enjoyed for decades for their health insurance coverage plans.
Apples to Apples
For the first time, employers can compare plans side by side or “apples to apples.”
Administrative Streamlining Lightens the Load
Most small businesses do not have human resources departments or easy access to critical information on health care costs or options. Covered California streamlines the health care benefit management processes and insurance options through a simple and concise web portal.
More Choice, More Flexibility
Instead of just PPO or HMO options, employers who participate in Covered California may be able to offer their employees a choice from all plans offered (see below)
Bottom Line Protection, Guaranteed
Covered California aims to help California’s small businesses curtail runaway health care costs by:
The health care law established broad benefit categories of typical coverage, including ambulatory patient services, emergency services, maternity and newborn care, mental health services, prescription drugs, preventive and wellness services and many more.
The Decision Process Is Easier With Four Coverage Values
Covered California provides a choice of four levels of coverage, each offering essential minimum benefits mentioned above. The employer will decide what level of coverage to offer, and employees may pick any plan offered within the exchange at that level. The four levels are based on the specified percentage of costs the plan will cover:
Bronze – 60 percent of the benefit costs of the plan covered. This represents minimum affordable coverage.
Silver – 70 percent of the benefit costs of the plan covered.
Gold – 80 percent of the benefit costs of the plan covered.
Platinum – 90 percent of the benefit costs of the plan covered
Participating plans in the Covered California health care insurance exchange must offer at least one plan in all four categories.
All of these coverage levels also limit cost-sharing:
Out-of-pocket costs can’t exceed Health Spending Account (HSA) limits.
Annual deductibles are limited to $2,000 for individuals and $4,000 for families in the small group market.
No cost-sharing for preventive services.
No annual or lifetime caps on the dollar value of services.
Buying from Covered California is mandatory, but “off-exchange plans” are subject to most of the same requirements as plans sold through Covered California, and employers may prefer the comparison tools and administrative services of Covered California to shopping in the private marketplace.