Under Obamacare, businesses with fewer than 50 employees can shop for health insurance on Covered California's exchange starting Oct. 1, 2013 — but they are not required to.
Covered California, the statewide health insurance marketplace created by the federal Affordable Care Act, announced Thursday the names of six insurance carriers that will offer plans through the state’s small businesses health exchange . Three of the companies -- Blue Shield of California, Health Net of California and Kaiser Permanente -- will offer plans to small businesses in the five-county greater Los Angeles region.
The other companies participating in the exchange, called “SHOP (Small Business Health Options Program),” are Chinese Community Health Plan in the San Francisco Bay area, Sharp Heath Plan in San Diego, and Western Health Advantage in Sacramento and the northern San Francisco Bay Area.
The plans will be available to the half million small businesses that employ 4.5 million people, state officials say.
Under the ACA, small businesses - defined as those with 50 or fewer employees - are not required to provide health insurance to employees. Only larger companies must do so, starting on Jan. 1, 2015.
But should smaller businesses wish to offer health insurance to workers, the SHOP exchange for the first time offers them competitively-priced health plans that until now have typically been available only to larger employers, said Peter V. Lee, executive director of Covered California.
“This is a game leveler,” Lee said. “Many small businesses are seeking to recruit talent against large employers…and they want to do that by offering top drawer benefits.”
What’s more, Lee said, businesses with fewer than 25 full time employees may be eligible for federal tax credits of up to 50 percent of the cost of premiums beginning on Jan. 1, 2014, but only if they buy employee health insurance through the SHOP exchange.
Lee says under the government-run plan, the employer chooses the level of coverage it will provide to employees from four broad categories designated as bronze, silver, gold and platinum. Because California opted for an "employee-choice" model, Lee said, workers will be able to choose from among the various plans offered within a particular level.
Lee said SHOP is offering "consumer choice and affordability" that in many of the state's 19 pricing regions is equal to or lower than what is now available to small businesses. He cited as an example a Covered California rate comparison of Los Angeles County, which is divided into eastern and western regions.
Covered California found that, compared with existing market rates, SHOP’s silver-level premiums for a 40-year-old worker will average 13 percent lower in the eastern portion of Los Angeles County and 17 percent less in the western region.
Small business owners can begin shopping on Oct. 1, 2013 for plans that will take effect on Jan. 1, 2014, and may also apply for coverage anytime after Jan. 1, 2014.