California Choice (CalChoice)

California Choice. Your Health. Your Choice, offered by BenefitsCafe.com

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CalChoice describes itself as an “exchange,” but “bundler” is a more accurate description.  An exchange conjures images of the New York Stock Exchange or the Chicago Mercantile Exchange, where buyers meet sellers and the prices fluctuate based on demand. That doesn’t happen in CalChoice (nor at California state’s “exchange,” Covered California for Small Business). At CalChoice, health insurance companies set the price of coverage based on the age of the enrollee and the plan that they select — the exact same way all other insurance companies set their rates.

CalChoice does give an employer the freedom to offer many different insurance companies at one time. A small employer can offer plans from these state-wide insurance companies:

  • Kaiser
  • Anthem Blue Cross
  • United Health Care
  • Health Net

Plus a few regional ones:

  • Sutter Health Plans (Northern California)
  • Western Health Advantage (Sacramento area)
  • Sharp Health Plans (San Diego area)
  • Oscar Health (Southern California)

An employer will receive one invoice from CalChoice and some employees can enroll in a Kaiser HMO plan, others in an Anthem PPO plan and still others in HMO plans from United Health Care (UHC). In this way, CalChoice bundles plans from many insurance companies.

Strengths

Kaiser HMO & Anthem PPO Combo: CalChoice is a good option for companies that want to offer employees a Kaiser HMO and an Anthem Blue Cross PPO plan.  Outside of CalChoice it is difficult for a small employer to meet the underwriting guidelines of an insurance company when the employer wants to offer Kaiser alongside another insurance company’s PPO. CalChoice solves that problem.  Note, however, that the CalChoice Anthem PPO plan uses the “Advantage” network which is different from the “Prudent Buyer” PPO network which Anthem offers its small employers that enroll directly with Anthem.   (See the section on “Challenges” below for more information on the difference between these two networks.

Ancillary Benefits:  Another strength of CalChoice is that they make it easy to offer dental, vision, chiropractic, acupuncture and life insurance, or “ancillary benefits.” Their employee worksheets show the costs and benefits of voluntary (i.e., employee paid) or employer paid plans. CalChoice also includes a no-cost discount dental and vision plan with their medical plans. This added benefit helps employees, particularly low-wage employees, who have few opportunities to get dental and vision coverage.

Challenges

Strict Underwriting Guidelines:  CalChoice’s strength of offering many different insurance companies is also one of its weaknesses. They must follow the guidelines of each separate company so they have little leeway when it comes to qualifying your employer group.  For example, outside of CalChoice some companies require only 25 or 30 percent of the employees to participate in an employer’s plan.  CalChoice requires 70 percent participation.

Limited Plan Combinations: CalChoice limits the plans that small group employers can offer to “two adjacent metal tiers.” Translated into English, this means that an employer can offer employees Gold and Silver level plans but not Gold and Bronze or Platinum, Gold, Silver and Bronze.  There is an exception to this rule: CalChoice allows small group employers to offer Platinum, Gold and Silver plans (3 Tiers).   All other insurance companies allow employers to mix and match any metal tier so that employees have more options.

Limited PPO Full Network Options:  Only Anthem Blue Cross offers PPO plans in CalChoice – Health Net and United Health Care only offer HMO plans.  Typically, people who select a PPO plan want to access the largest network of doctors and hospitals.  Anthem only offers a single Gold or Silver PPO plan with the Advantage network.  (See the section below on the Advantage network.) CalChoice does not offer Platinum or Bronze level full network PPO plans.

One must choose a PPO plan carefully because Anthem offers other PPO plans that use the “Select” network, which has fewer doctors and hospitals.  As CalChoice says: “The Select PPO Network is a subset of the physicians who are also participating providers in Prudent Buyer PPO… The Select PPO network provides access to more than 40,000 California doctors and specialists, and more than 300 hospitals. Prudent Buyer PPO physicians who are not in the Select PPO network are considered out of network for Select PPO.” So, choose your plans wisely, which the professional staff at BenefitsCafe.com can assist you with.  Give us a call (800)746-0045

Not the Largest Anthem PPO Network: CalChoice’s largest network PPO plans is the Anthem Advantage PPO network.  According to CalChoice, “the Advantage PPO Network is a subset of the Prudent Buyer PPO Network and provides access to more than 54,000 California doctors and specialists and just under 400 hospitals…Anthem’s Prudent Buyer PPO network … provides access to more than 62,000 California doctors and specialists, and more than 400 hospitals.” The Anthem Advantage PPO network is large, just not the largest.

Too Many Choices Can Confuse Employees: CalChoice offers many plans with many provider networks from many insurance companies.  This addd up to a lot of choices for employees, who may become overwhelmed.  At Benefits Café, we can assist you with communicating the information to your employees.

Separate Admin Fee:  CalChoice charges groups $20 or $25 per month as a separate administrative fee. Your rate depends on the number of employees you enroll. The admin fee does not appear on any of the quotes you’ll get, however it will appear on your invoice.  It’s a hidden charge that upsets some people.

Pricing and Employer Strategy

Competitive Pricing:  Many of the plans CalChoice offers have different benefits than the plans available directly from the participating companies, so an apples-to-apples comparison is a bit difficult. CalChoice is competitive in some instances and not in others, so the best option is to get a quote to see how it looks for your company. CalChoice is very competitive when you factor in the extra features included in CalChoice medical plans. Also, employees seem to appreciate the extra benefits such as discounts on tickets to movies and major league baseball games, in addition to discount dental and vision plans.

Kaiser HMO & Anthem PPO Combo:  As mentioned in the “strengths” section, CalChoice is a good option for companies that want to offer employees a Kaiser HMO and an Anthem Blue Cross PPO plan.