CA Small Group Insurance Solutions

California is a great atmosphere for small-business owners. Aside from its immense size, the diverse population requires a wide variety of shopping and service options. This is where small businesses step in, providing a myriad of opportunities for the people of California. But it is no picnic for the entrepreneur looking to build a workforce. Employees are demanding more and more benefits, including health insurance, and as of 2003, only 44% of small businesses in the state offered it.

Fortunately, California lawmakers also know how important small businesses are to the economy. They now sponsor a health insurance pool for small businesses of 3-50 employees. The Health Insurance Plan of California guarantees coverage to employees in one of many health plans offered through HMOs or insurance companies. Insurance carriers are also working to provide small businesses health insurance in accordance with state regulations.

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Small Group Plan Details

In California, small business owners must contribute at least 50% of the premium costs to a plan that is employee-priced. They can also set up an HSA for their employees, as long as they have made an agreement with the insurance carrier or bank as to how much they will contribute. The Health Savings Account (HSA) is a tax-advantaged savings account that is similar to an IRA. Members can invest up to a maximum contribution into these plans, and draw on them when necessary for medical coverage.
 
Carriers must be willing to renew your insurance policy without regards to the health of the members of the group; they can only cancel a policy if it has not been paid or if their is fraud involved. Finally, the self-employed in California are permitted to join a group policy, which is usually less expensive than an individual plan, if they are legally considered Independent Contractors. They are also eligible to enroll in an individual plan or begin an HSA.

The difference between a group plan and individual coverage is small in most cases. Group policies usually have smaller costs because insurance companies give group policy-holders their “wholesale” rate. Group policies sometimes offer extra benefits such as dental or vision coverage, at a lower cost than an individual might be able to get them. But generally, basic coverage and deductible rates are competitive between the group and individual policies. 

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