In 2010, California created the first Affordable Insurance Exchange, Covered California. Beginning in fall 2013’s open enrollment period, Covered California will help 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. Learn more about Covered California now.

Covered California Is A Centralized Health Coverage Marketplace For Individuals And Small Businesses

Covered California has two separate programs: the Individual Exchange and the Small Business Health Options Program (SHOP). The SHOP is a hub that aggregates plans and acts as your advocate and negotiator with insurance companies. It organizes qualified 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.

In 2014, the SHOP will serve businesses with two to 50 employees and potentially as many as 100 employees, depending on actions by the Legislature. In 2017 all employers with 100 or fewer employees may join. States may allow businesses with more than 100 employees to participate after 2017.

Covered California Will:

• qualify health plans offering coverage through it (certifying, recertifying and decertifying)
• rate each plan offered through it on the basis of relative quality and price
• standardize consumer information on qualified health plans
• provide an electronic calculator so businesses can determine the cost of coverage after applying for premium tax credits and cost-sharing reductions
• host a website and toll-free telephone hotline so businesses can compare information on qualified health plans and can apply for and purchase coverage.

Shop serves small businesses

Purchasing power

Through Covered California’s SHOP program, Small businesses will be 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.

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, 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

Covered California aims to help California’s small businesses curtail runaway health care costs by:

• Offering tax credits as much as 50 percent of employer’s contribution to health coverage for eligible businesses.
• Hosting competition among health care plans to drive down costs.
• Requiring plans to spend at least 85 percent of insurance premium dollars for large group plans and 80 percent for small employer and individual plans on care rather than administration.
• Allowing employees to pay more if they opt for a more comprehensive plan.
• Keeping employees healthier – reducing absenteeism, improving productivity and cutting businesses’ health care costs.
• Content provided in partnership with Health Law Guide for Business.