Blue Shield of California (BSCA) is a not-for-profit medical insurance company that operates exclusively in California. While its nearly $18 billion in annual revenue makes is significantly smaller than the behemoths of UHC and Anthem; those other companies operate in many states. In 2015 Blue Shield covered about 20 percent of the small group employers (1-100 employees) in California, which makes it second only to Kaiser in market share.
Large Provider Networks: Blue Shield of California has contracted with a huge number of doctors and hospitals which makes their small group HMO and PPO provider networks very large. Since 2015 BSCA has been very price competitive and they have become one of the most popular insurance companies for small businesses, particularly for those employers who want to offer PPO coverage – because of their great benefits, extensive provider networks, and very low rates.
Low Participation Requirements: Blue Shield has the lowest participation requirements for new groups. When 5 or more employees enroll; BSCA requires that only 25 percent of the eligible employees enroll in the health plan. Many other companies require 70 percent of the eligible employees to enroll in the plan. This means that your company may qualify for coverage with Blue Shield whereas they might not qualify with a different insurance company.
No Participation Requirement with Trio ACO HMO: When a small group employer (1-100 employees) offers only the Blue Shield Trio ACO HMO plans there is no minimum participation requirement.
Networks Combinations: Blue Shield offers a narrow network HMO plan, called “Local Access+” (“Local Access Plus”) which excludes the highest priced hospitals and doctors. Unfortunately, BSCA won’t allow a small employer to offer their full network, Access+, with the narrow network, Local Access+. Other insurance companies (e.g., UHC, Aetna) allow a small employer to offer all HMO and PPO networks; but not BSCA.
Large HMO Renewal Rate Increases: Another challenge is that BSCA’s HMO small group plans have seen pretty large percentage rate increases in recent years. While their PPO plans have had modest increases (3 to 7 percent) their HMO rates tend to be higher. True; BSCA’s HMO rates are still competitive; but sometimes it can be sticker shock for an employer to see a large renewal increase in rates after only a single year of coverage.
Pricing and Employer Strategy
Blue Shield of California has been extremely price competitive for the last few years; offering the inexpensive PPO and HMO plans. Their price advantage has diminished recently and UHC and Anthem are competitive and less expensive in some parts of California.
Employers with high wage employees who are looking for solid PPO and HMO provider networks and well-priced plans should take a close look at BSCA.
Companies with very low wage employees (e.g., restaurants, small manufacturers, etc.) may also find that BSCA is a good fit. Their Trio ACO HMO plans have very low premiums and BSCA has the lowest participation requirements (i.e., only 25% of eligible employees must enroll) compared to other California medical insurance companies.