As simple as the question is, the answers to choosing your California group health insurance plan are complex and many. Since "it depends" doesn't really help much, let's look at some key issues in the choice and see if we can at least narrow the options. As luck would have it, the best approach is not to pick a plan at all but choose a carrier and a great option that offers flexibility and budgetary control.
The Small Group equivalent of a Cafeteria plan
Anthem Blue Cross was the first to originate the Small Group cafeteria with the unveiling of their Employee Elect option. Most of the major carriers offer a version of this which allows employees to choose different plans based on some fixed % or contribution. These options are the perfect blend of employee choice and flexibility combined with employer control over group health benefits cost. Essentially, these "cafeteria" options allow the employer to offer all the plans to each employee and establish a fixed company contribution or % contribution (of a certain plan). Employees can match their health coverage requirements with their own budgets while the employer can fix his/her costs to a given monthly budget. When an employer tries to choose a "one size fits all" plan for their carriers, it rarely works for everyone. Some people have preferences for HMO's while other detest them. The same can be true for PPO's where people do not like the cost sharing aspect of them. Some employees want to keep their cost to a minimum while others have large health bills and would rather contribute more and have richer benefits. This option is hard to beat since it offers a full suite of HMO, PPO, HSA. and Basic Hospital plans. It's hard to find a better choice for Small Group health coverage in California than Employee Elect or the equivalent with another carrier.
Anthem Blue Cross also works well for out of State employees because of their participation in the Blue Card network for PPO plans. The carrier has extensive networks throughout California and is run by Wellpoint, which is arguably one of the top two health carriers in the Nation.
What if your Company decides on another California health insurance carrier?
There are times when an employer requests a carrier that does not offer an option such as Employee Elect. In this case, how does a company go about analyzing and choosing a California group health insurance plan. There are a few ways to look at this.
Choosing a Small Group health plan based on company budget
The easiest approach is to decide on your monthly Company benefits budget and choose a plan that fits within this budget. You
can either pick a plan that the company will pay 100% of according to the monthly budget or a plan in which a company will pay a percentage (California Guaranteed issue mandates at least 50% of the employee's premium) of that plan. Essentially, you are trying to choose the richest plan that stays within your budget. This works if you have designated budget that you absolutely must stay within.
Choosing a Group health plan based on type of industry and employees.
For some employers, the budget issue is not so concrete as to narrow options. In this case, it's important to look at the type of industry your company is in and also, the type of employees you are looking to acquire and retain. The major health insurance carriers typically have a suite of HMO, PPO, and HSA plans with different price points and benefit levels. For example, on the PPO side, there may be a $10 Copay, $20 Copay, and so on down to the high deductible plans. The deductible. coinsurance percentage. max out of pocket. prescription costs and of course, monthly premium changes as you go up the scale. The HMO's and HSA's usually have this graduated approach as well.
The level you would choose depends on what type of employee are trying to retain. If you are in the high-tech arena, employees may expect richer benefit packages as they are coming from larger companies and are used to such a level. We usually see $10 or $20 copay plans in this situation. For a small service or manufacturing company, the $30 or $40 might be adequate. Some employers wish to offer richer benefits to offset lower wages in a given industry.
Completing the benefits package with dental and/or vision.
An inexpensive way to complement your choice of Group health insurance plan is to offer dental and/or vision. Dental and vision is actually quite valued by employees even though health insurance is covering the real risk. Dental and especially vision benefits can be very inexpensive relative to the perceived value from the employees. The same requirements for participation and contribution levels apply to Dental insurance. Vision typically requires 100% participation. The Employee Elect option above can also apply to the dental suite of plans as well.
In the end, there are dozens of plans on the market. Since employers are typically not analyzing and choosing Group health benefits all the time, it can be confusing. In the end, it is probably best to speak to your California group health insurance broker regarding your particular situation. With the above points, as least you some important avenues to explore with your health broker after you have run your California group health insurance quote .