Private Health Exchange Has Options for Small Companies Affected by New Mandate

CaliforniaChoice is bullish on expansion of the small-group market.

Like its public counterpart, Covered California, the private insurance exchange is prepared to welcome employers with 51 to 100 employees into the program Jan. 1, 2016.

California law still requires this group to be considered “small employers” for the purpose of health insurance, starting next year. That means they have to offer essential health benefits and adhere to different rating rules that could make coverage more expensive.

Business interests widely oppose the expansion. On Oct. 7, President Barack Obama signed legislation that gives states the option to expand their small-group market to 100 employees — or keep it at 50. But California legislators would have to change state law before that could happen here.

“We actually love it,” Ron Goldstein said of the initial mandate in the Affordable Care Act. President and CEO at Choice Administrators, the group that runs CalChoice, Goldstein sees the expansion as “a real boon for both us and Covered California … It allows us to make inroads into the (larger) market.”

Costs could go up for some employers, but that’s coming regardless, Goldstein said. The shift from a composite approach with a uniform premium for each family type (i.e. single, with partner by family) to age-rating required in the small employer market means some premiums will go up and some will go down.

“At some point in time, this is going to happen,” Goldstein said. “Whether it’s now or in two years, if this is where the market is going — let’s get on with it.”

While CalChoice is based in Southern California, it offers coverage in the Sacramento area. A private program, it does not provide the tax subsidies available through Covered California, but it has an almost 20-year track record, offers more choice than Covered California and has a loyal following of insurance brokers to sell coverage.

Effective Dec. 1, Sutter Health will offer its HMO through CalChoice. This addition means employers have access to plans to coverage at all four local health systems. Kaiser Permanente and Western Health Advantage already participate in the program. Kaiser provides its own doctors and hospitals. Western Health Advantage offers access to local Mercy hospitals and the UC Davis Health System.

CalChoice has about 12,700 employers in its program and 220,000 members.Covered California has 2,865 employers and 19,465 members as of Aug. 15.

If California wants to cap the small-employer market at 50 employees, legislators will have to return to Sacramento for a special session — and act before the end of the year.

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