California Group Health Plans
California has a very competitive market for small group health insurance. Our state purchased over $122.9 billion of health insurance in 20131. As shown in the chart below, six health insurance companies accounted for ninety-three percent of the money spent on health insurance.
|Health Insurance Company||Percent of Total Revenue|
|Anthem Blue Cross||20%|
Each of these companies offers unique California group health plan benefits and provider networks. They all compete on price for small group business. Our task is to help you select the benefits, providers and monthly premium that best fits the needs of your business. Give us a call and we can help you with this process.
Kaiser Permanente is a “staff model: HMO, which means that the insurance company includes hospitals, doctors, nurses and insurance personnel. Kaiser is a “closed” system so that you must receive all of your treatment from a Kaiser doctor or hospital – except in an emergency. By being a closed system, Kaiser can contain costs better than other California group health plans. Doctors are paid salaries for their services as opposed to traditional arrangements where doctors and hospitals are paid for every test and procedure they perform. The Kaiser system offers high quality comprehensive benefits at a low cost relative to other companies. You give up the freedom to see non-Kaiser doctors for the Kaiser benefits and low monthly premium. Kaiser offers 5 copayment HMO plans; 3 deductible HMOs; 2 HRAs; 2 PPOs, 1 POS; and 3 HSA plans. The Kaiser HSA plans are the least expensive small group California health insurance plans available in the state of California and they are an excellent bargain.
As of 2010 Kaiser has about 8.6 million members in ten states. Kaiser’s California membership is the largest by far. Included in this total are nearly ¾ of a million seniors in Kaiser’s “Medicare Advantage” program (MA – Senior HMOs in place of Medicare)2.
Anthem Blue Cross is the California subsidiary of Wellpoint, Inc., the largest health insurance company in the United States, insuring 33 million Americans. As of 2010, Anthem Blue Cross insures about 8.2 million Californians. Anthem Blue Cross offers HMO and PPO plans to small businesses. They have been the most innovative of all of the California health insurance companies in creating new plan designs. Anthem Blue Cross has many PPO copay plans with deductibles from $250/yr. to $5,000/yr. They also offer PPO plans with low deductibles but no brand medication as a way to keep their premiums low. Anthem Blue Cross offers “Lumenos” HSA plans that integrate an HSA trustee with the insurance company so that members receive a combined accounting of their HSA account fund and the amount of money applied to their deductible in the insurance plan.
Health Net is a regional insurance company that provides health insurance to about 6 million people. Approximately 3.1 million of Health Net’s members are in the Tricare program for military personnel. As of June 30, 2010, Health Net insured 441,000 in the individual and small group market in a number of states. Health Net of California offers more types of health plans than any other insurance company in California. They offer 58 HMO plan options; 5 HSA compatible health plans; 2 HRA plans; 2 POS plans; and, 10 PPO plans for a total of 77 plans! This is too many choices in my opinion. It creates more confusion than it helps. In their PPO product offering they have “standard” plans with lower deductibles and copays and “value” plans with higher deductibles and copays. The Health Net HMO plans include “Elect Open Access” (EOA) that enable members to get a consultation from a Health Net PPO provider in addition to receiving care within the HMO network. The Health Net HMO and HMO-EOA plans have “standard,” “value,” and “advantage” options with progressively less benefits for each.
Further complicating – or offering more choice – is Health Net’s reduced HMO provider network options. They offer their full HMO network, a smaller “silver” network and the smallest “bronze” HMO network. The networks with fewer doctors and hospitals are less expensive. So, the Health Net Advantage HMO Bronze plan is one of their lowest benefit plan offerings. Health Net also offers plans for employees and dependents who prefer Spanish Speaking providers in Southern California and Northern Mexico. These plans are the “Salud Health Net Y Mas” HMO plans and are very inexpensive.
Blue Shield of California is a not-for-profit health insurance company that operates exclusively in California. Blue Shield insures 3.5 million Californians of which about 160,000 are Tricare military members leaving commercial membership of about 3.3 million people.
Blue Shield of California offers 8 Access Plus HMO plans which enable members to go directly to certain specialists within designated medical groups. Two other “Local Access” HMO plans have fewer doctors and hospitals and are less expensive options. Small businesses can only offer their employees the full network or the small network HMO plans, not both. Blue Shield has 9 HSA plans, 14 PPO plans and one Point of Service (POS) plan. The Blue Shield “Standard” and “Premier” PPO plans have the richest benefits but they are also expensive. The PPO “Value” plans are less expensive but also have higher deductibles, copays and out of pocket limits. The Shield Spectrum 1000 and 3000 PPO plans have high deductibles, reasonable premiums and have been popular with small business owners. Blue Shield also offers competitive group dental, vision and life insurance plans.
UnitedHealth Care/Pacificare is the second largest health insurance company in the United States with 25 million members. UnitedHealth Care purchased Pacificare in 2005 and has been operating in California as “UnitedHealth Care/Pacificare” with approximately 1 million members.
The HMO plans offered in California have been under the Pacificare name. They have 22 HMO plans that range from rich benefit-high premium $10 copay, 100% hospital coverage to low benefit-low premium, narrow network (HCP) plans with a $1500 deductible, $25 copay for primary care visits, $75 copay for specialist visits after the deductible. All of the UnitedHealth Care/Pacificare HMO plans are called “Signature Value.” UnitedHealthcare/Pacificare “Signature Value Advantage” HMO have a smaller network of doctors and hospitals. The Signature Value HCP has an even smaller network of providers than the Signature Value Advantage plans. UnitedHealth Care offers 16 PPO plans; 4 HRA plans; and 6 HSA plans. As of October 2010, the UnitedHealth Care HSA plans are extremely well priced and an attractive option for small group employers looking to offer catastrophic coverage at an affordable price.
Aetna is a national medical insurance company that insures 35.8 million people nationally. In California, Aetna offers individual, small group and mid-size to large group coverage. They have 12 HMO plans including 5 full network plans; 1 deductible HMO plan; 4 limited network “Aetna Narrow Network” (AVN) plans; and 2 Vitalidad Plus HMO plans that have provider networks in Southern California and Northern Mexico.
Aetna of California offers 10 PPO plans using their “Managed Care” (MC) PPO network, 1 plan that uses their “PPO” network which has more providers than the MC network; and, one very expensive indemnity plan where members can access any provider (this is normally used for out of state employees or those living in remote areas that are not near in-network providers). Aetna offers 2 Health Reimbursement Account (HRA) high deductible health plans and 4 Health Savings Account (HSA) compatible plans. Aetna MC PPO plans have deductibles from $250/yr. to $10,000/yr. and sometimes they are a good fit for a company.
CIGNA is the largest “other” health insurance carrier in California. CIGNA has virtually no membership nor competitive California group health plans offered in the individual and small group health insurance markets. CIGNA does seem to be competitive in the mid-size to large group markets in California and sometimes is a good fit for large companies that have employees in many states.
California Choice (also referred to as CalChoise) is not another health insurance company but it is an option for small employers in California. CalChoice allows small businesses to offer Health Net, Anthem Blue Cross and Kaiser Permanente plans at the same time. For example, a small business may have some employees who love Kaiser while others hate Kaiser (people seem to feel passionately one way or the other about Kaiser.) All of the insurance companies require about 75% of the eligible employees be enrolled with that single insurance company, which make offering Kaiser difficult if more than 25% of the employees want Kaiser. That’s where CalChoice can help.
An employer can have half of the employees on Kaiser and the other half on Health Net or Anthem Blue Cross. The down side to this is that CalChoice plans are more expensive than when purchased directly through either Kaiser, Health Net or Anthem Blue Cross. Also, CalChoice has only 3 PPO options ($1,000, $3,000, and $4,000/yr. deductibles as of October 2010) and two HSA compatible plans. The high price and the limited PPO selection make CalChoice a difficult choice for most employers. The exception is when some employees really want Kaiser and others really don’t want Kaiser. CalChoice offers 33 HMO plans from the three different insurance companies. CalChoice is marketing itself as a “health insurance exchange” in advance of the central role these will play in 2014 as a result of the Patient Protection and Affordable Care Act (PPACA).
Health Net Options (or Hn Options) allows small business owners to combine some unique Health Net plans with Kaiser Permanente plans. It is different from CalChoice because a small business can offer the Hn Options plans “along side” standard Kaiser plans. These are not “bundled” together as CalChoice is. Rather, an employer can offer Hn Options and Kaiser plans as two separate options to employees. Hn Options has more lenient “participation” requirements than standard Health Net Plans. Hn Options requires only a minimum of 5 employees to enroll in the plan. Standard Health Net plans require 75% of the eligible employees to enroll with Health Net. When more than 10 employees enroll with Hn options, a small group can offer a broader selection of plan designs. However, similar to CalChoice the benefits and rates tend not to be competitive for Hn Options when compared to benefits and rates available directly from Health Net.
HSA California is another bundled plan option, similar to CalChoice. With HSA California a small group employer can offer Health Net HSA PPO plans with Kaiser HMO HSA plans. You’ll get one bill from HSA California. HSA California offers 2 Kaiser HMO HSA plans ($2,200/yr. deductible and $2,600/yr. deductible) and 3 Health Net PPO HSA plans ($2,500/yr., $3,500/yr. and $4,500/yr. deductibles). Again, the rates and benefits seem to be better outside of these bundled arrangements. If you’re interested in learning about HSA plans in California, click here HSA California.
1The California Healthcare Foundation Health Care Almanac, “California Health Plans and Insurers, California Health Care Almanac Quick Reference Guide” is an excellent source of information on the market for health insurance in the state. All Health Insurance Carriers by Share of Revenue, 2011: http://www.chcf.org/~/media/MEDIA%20LIBRARY%20Files/PDF/Q/PDF%20QRGHealthPlansInsurers2011.pdf.
2CHFC report, “California Health Plans and Insurers, California Health Care Almanac Quick Reference Guide”: http://www.chcf.org/~/media/MEDIA%20LIBRARY%20Files/PDF/Q/PDF%20QRGHealthPlansInsurers2011.pdf