Health insurance is not mandatory although it should be. It is the absolute most important benefit a company can offer its employee’s to improve retention. Group health insurance can be very complex and there are many plan options available. Allow us to work with your company to put together the strongest plan that is just right for your budget and creates longevity in the workplace. Did you know there are insurance options that can be offered on a voluntary basis? This means the employer pays nothing and yet still takes a tax break on FICA and payroll taxes. The cost is 100% incurred by the employee. You are simply harnessing the company to give the opportunity to offer voluntary benefits.

California is a state where governmental regulation is near perfect. This is particularly true for the field of health care insurance. The small group health insurance sector in California is governed by special rules. These rules address the social requirements of offering health coverage to employees working in small organizations. At the same time, they also provide a fair amount of protection to the insurance companies in avoiding costs that are either unpredictable or are volatile. The group health insurance California laws offer not only protection that include guaranteed issue of insurance coverage to small groups but also give portability and rating protections. Further, these laws present fair marketing provisions to the insurers.

Risk Selection in Group Insurance

Small groups are subject to what is called an RAF otherwise known as “Risk Adjustment Factor”. Rates are given at an RAF of 1.0. This is standard. Depending on the health status of the group, if it is poor the RAF can go up 10% to a 1.1 and if the health status is very good the RAF can drop to a .90 or anywhere in between. The RAF can go no higher or lower.

Here are some generalities of how the rating process works for both small and large group:

- Generally the smaller the group(ex: <10) the RAF has a greater chance of being higher than standard.

- In large group (groups over 50 employees) the rates released as composite. This means that the underwriters take everyone’s age and risk and come up with one rate per plan for everyone in the company. This of coarse is very beneficial for the older individuals in the company and less for the younger individuals.

Due to the above, many insurers impose restrictive terms and conditions about the type of coverage available to large groups and its costs.

In the above circumstances, the governmental regulations and state laws in California address and enforce laws that are related to the small group private sector health care plans. Still, these laws are directed towards the insurance carriers and not towards the employers to ensure fair market protection. They are categorized under 1) Guaranteed Issue, 2) Guaranteed Renewal, 3) Rating Protections, and 4) Portability.

Contact Us

Due to our continuous exposure to up to date regulations involved in group health insurance California, we are able to work with you to put together a package that is most cost effective and beneficial to your company or organization. Call us toll free at 888-202-9441 and speak to one of our group health insurance specialists or email us at admin@ezhealthinsuranceca.com.

Click below to get a quote now for California Health Insurance