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-seven percent of the enrollment in small group health insurance plans in California.
|Health Insurance Company||Percent of Small Group Enrollment|
|Anthem Blue Cross||25%|
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 (800)746-0045.
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 many co-payment HMO plans; deductible HMOs; and HSA-compatible plans. Kaiser also offers PPO plans where a member does not have access to Kaiser – this is intended for business owners or key employees whose company offers Kaiser but who want to use non-Kaiser doctors and hospitals.
California small group employers can purchase Kaiser plans three different ways: through CalChoice; through Covered California for Small Business (SHOP); or directly from Kaiser. The benefits and rates are identical regardless of which way an employer purchases coverage.
As of 2016 Kaiser had about 10.2 million members in nine states. Kaiser’s California membership is the largest by far with 8 million members2.
Anthem Blue Cross is the California subsidiary of Anthem, Inc., the largest health insurance company in the United States, insuring 38 million (or 1 in 9 Americans) in 14 different states.(3) As of 2013, Anthem Blue Cross insured about 600,000 Californians in the small group market. They offer HMO, PPO and HSA plans to small businesses with deductibles ranging from $0/yr. to $6,000/yr. One of the Anthem Blue Cross’ strengths is the large number of doctors and hospitals who participate in their PPO and HMO networks. Anthem also offers progressively smaller (and less expensive) “Select” and “Priority Select” networks of doctors and hospitals but small employers can offer only one network, i.e. full network, or Select network, but not both full and narrow networks.
Health Net is a regional insurance company that provides health insurance to about 6.1 million people. In 2016 California Regulators approved the merger of Health Net with Centene, a fortune 500 company that specializes in Medicaid and Medicare. Approximately 2.8 million of Health Net’s members are in the Tricare program for military personnel. In 2015 Health Net insured 244,000 people in the California small group market.(4)
To adapt to the requirements of the Affordable Care Act (ACA), Health Net of California dramatically reduced the number of health plans they offer. For example, in 2016 Health Net offers only one PPO plan in the Platinum, Gold, Silver and Bronze metal tiers. They offer no Silver or Bronze level HMO plans. A California small group employer (1-100 employees) can offer Health Net’s full network HMO plans OR, their narrow network plans – but not both full and narrow network HMO plans. Health Net offers 5 HMO networks including the Full network, Whole Care, Smart Care, Community Care (available only in Los Angeles and Orange counties) and “Salud Health Net Y Mas” HMO plans – for employees and dependents who prefer Spanish Speaking providers in Southern California and Northern Mexico (only in certain areas.) Health Net also offers a single HSA compatible health plan (Bronze level); a single EPO plan (Silver level); and 4 narrow network HMO-like Pure Care HSP plans in Platinum, Gold, Silver and Bronze metal tiers.
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 464,000 were in the small group market in 2013 at which time only included employers with only 2-50 employees (small group expanded to 1-100 employees in 2016). (5)
The Blue Shield of California provider networks are very large and include most California doctors and hospitals. Blue Shield offers their full “Access Plus” HMO plans which enable members to go directly to certain specialists within designated medical groups. The “Local Access” HMO plans have fewer doctors and hospitals and are less expensive options. Blue Shield recently introduced their “Trio ACO” (Accountable Care Organization) HMO plans which have very few hospitals but enable revenue sharing among the hospitals. Small businesses can only offer the Blue Shield full network or the small network HMO plans, not both. Blue Shield offers full network Silver and Bronze level HSA plans and Platinum, Gold, Silver and Bronze level PPO plans. 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 30 million commercial members. With $157 Billion in annual revenue, UHC ranked as the 14th largest corporation in the United States in 2015!(6) UnitedHealth Care purchased Pacificare in 2005 and has been operating in California as “UnitedHealth Care/Pacificare” with approximately 100,000 small group members.
The HMO plans offered in California had been under the Pacificare name and are now branded as UnitedHealth Care. They offer PPO, HMO and HSA plans and unlike most other insurance company, UHC allows small employers to offer full and narrow provider networks at the same time. The UnitedHealth Care/Pacificare full network HMO plans are called “Signature” plans while the narrow UnitedHealthcare/Pacificare narrow network HMO plans include “Advantage,” “Focus” and “Alliance” plans which have smaller networks of doctors and hospitals. The “Select Plus” PPO plans are the full network plans while the “Core” network PPO plans have fewer doctors and hospitals.
Aetna is a national medical insurance company that insures 24 million people nationally.(7) In California, Aetna offers small group and mid-size to large group coverage and covers about 180,000 people in the small group market. Aetna allows small employers to offer full, medium and narrow provider networks at the same time. They offer HMO plans with full network plans; limited network “Aetna Value Network” (AVN) plans; “Deductible” network and the smallest “Basic” HMO network.
Aetna of California offers PPO plans using their “Managed Care” (MC) network – which Aetna defines legally as a “POS” or Point of Service Plan. Aetna does offer a “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 also offers Health Savings Account (HSA) compatible plans.
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, Aetna and Kaiser Permanente plans at the same time. (CalChoice also includes regional HMO plans, e.g., Sutter Health Plus in Norther California, Western Health Advantage in the Sacramento area and Sharp Health Plans in the San Diego area.) 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. Pre-ACA (before 2014) CalChoice plans were more expensive than when purchased directly through either Kaiser, Health Net or Anthem Blue Cross. That changed January 1, 2014. Now, CalChoice offers its plans at the exact same rate as plans that Kaiser offers directly. Aetna, Health Net and Anthem Blue Cross plans are comparably priced to plans these insurance companies offer directly. The benefit of CalChoice is that you can offer your employees four different insurance companies at the same time. The employer receives one monthly invoice.
CalChoice markets itself as a “health insurance exchange” as this has become a popular buss word with the Patient Protection and Affordable Care Act (PPACA). Unlike an exchange, however, prices don’t fluctuate based on demand. Rather rates and benefits are fixed and filed with the State of California. CalChoice does allow a greater selection of insurance companies, with limitations. One limitation is that a small employer can only offer the plans from one or “two adjacent” metal tiers. This means an employer can offer only Silver or only Gold Level plans, or Silver and Gold tier plans. But not Platinum and Silver or Bronze and Gold. Another limitation is that each of the insurance offers different provider networks with specific plans, for example a Bronze Aetna plan may use the Basic or Deductible or “AVN” network. It’s a bit confusing. Also, the only PPO plans available in CalChoice are through Anthem Blue Cross and some of these use the “Select” or narrow PPO network. So, you’ve got to look closely at the plans. Contact BenefitsCafe.com and we can help you set this up for your employees (800)746-0045.
1The California Healthcare Foundation Health Care Almanac, “The Private Insurance Market in California, 2013” is an excellent source of information on the market for health insurance in the state. February, 2015