Covered California, the state’s health plan marketplace or “exchange” established under the Affordable Care Act, today announced the commercial health plans and tentative rates available to small employers during the upcoming enrollment season.
The announcement provides new clarity for employers that will be eligible for plans available through the Small Business Health Options or “SHOP” program. It follows a similar May announcement of the individual health plans and rates available through the exchange.
For Marin, Sonoma, Napa and Solano counties, region 2 out of 19 in the health exchange, the following health plans will participate: Western Health Advantage, Blue Shield of California, Health Net of California and Kaiser Permanente.
Lake and Mendocino counties are part of region 1, with the same participating health plans.
Chinese Community Health Plan and Sharp Health Plan are also participating in California, for a total of six providers state-wide.
While noting the presence of some of the North Bay’s largest carriers, “I’m surprised to see that there are only six carriers in the SHOP — I thought we’d have more options,” said Terry de Decker, vice president of employee benefits at VANTREO Insurance Brokerage, shortly after the announcement.
Covered California said that the small group rates would be comparable to 2013 small-group market rates, with variance by pricing region.
Plans offered through the exchange are tiered by “metal levels,” with bronze on the lower end and platinum on the top end. Participating employers are able to select what tier they wish to offer and their contribution to employee premiums, and employees will then be able to select from a list of corresponding plans. Even if employees chose a variety of plans, employers will still be able to make a single payment to Covered California.
The announcement did not provide estimated premium cost for any of the North Bay regions, but provided comparative examples for certain metropolitan areas. Further estimates of rates for the North Bay and other regions will be released in the future.
“The rates for next year are the same or in many cases lower than we’re seeing in the small group market today,” said Peter Lee, executive director of Covered California.
Premium prices for the third-tier Silver plans in 2013 were estimated to be 2 percent lower than average small group plan prices for region three’s Sacramento County, averaging $329 per month. The greatest estimated decrease was in region four’s San Francisco, with average costs of $316 representing a 28 percent estimated savings.
Costs were estimated to increase on average in region six’s Alameda County, up 12 percent by the same measure and averaging $384 for those silver-level plans.
Smaller employers with up to 25 employees and average annual compensation of less than $50,000 per employee will be eligible for a tax credit meant to subsidize the cost of premium contributions. The credit depends on criteria like the number of full-time-equivalent employees and the level of premium contribution, with the greatest benefit for companies with ten employees or less and average compensation of less than $25,000 per year. The credit is lower for tax-exempt organizations.
That benefit can be worth up to 35 percent of the cost of premiums in 2013, and will be worth up to 50 percent of premiums for SHOP health plan participants in 2014.
The SHOP program is tailored for companies with 100 or fewer employees, but will be available only for those with up to 49 employees next year.
The program will expand to include companies with between 50 and 100 full-time-equivalent employees in 2015, and those in that range who fail to offer insurance will be subject to a penalty.
Employers with up to 49 employees are not mandated to provide coverage to their employees or face a fee under the Affordable Care Act, but Covered California describes the program as a cost-effective way to find coverage. Employers can also purchase insurance on the private market, but will not be eligible for the same subsidies and perks.
Ms. de Decker said that the initial SHOP rollout relieved some of the pressure on employers, who can continue with their current carrier if desired. It will also allow more time to see how premium costs ultimately play out, as well as to allow training for brokers to understand the pricing.
“September is going to be the big month,” she said of that training. “They’re going to have to flip the switch in October.”
Employers with 50 or more employees were originally required to offer insurance on January 1 of next year, but the Obama administration unexpectedly announced last month that it had extended that deadline until 2015. Those failing to provide insurance through the exchange or otherwise will eventually face a $2,000 fine per employee, though the first 30 employees would not be included in that calculation.
Ninety-two percent of employers with over 50 employees already offer a health plan, according to a July statement by California Insurance Commissioner Dave Jones. Open enrollment will begin Oct. 1.
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