Coverage
Medical plans for small and mid-size businesses, including HMO, PPO, EPO, and HSA-qualified options.
Who it's for
What it covers
How it works
You pick one or more plans, from a single carrier or a multi-carrier option such as CaliforniaChoice, and decide how much of the premium the business pays for employees and dependents.
Eligible employees enroll themselves and their families, and anyone declining coverage signs a waiver. Coverage starts on the first of a month once the carrier approves the group.
The business pays the carrier each month. Employees' share comes out of their paychecks, usually pre-tax through a Section 125 plan.
Each year the carrier sends new rates before your plan anniversary. You can keep your plans, change them, or move to another carrier.
Before you decide
Carriers typically require the employer to pay at least half of the employee-only premium and a minimum share of eligible employees to enroll. Groups that fall short can still enroll during the annual November 15 – December 15 window.
HMOs keep costs down with a primary care doctor and referrals. PPOs cost more but include out-of-network coverage. EPOs sit in between, with no referrals but no out-of-network benefits except emergencies.
A high-deductible plan lowers premiums and lets employees fund a Health Savings Account with pre-tax dollars. Some employers add a medical reimbursement plan to soften the deductible.
A Section 125 premium-only plan lets employees pay their share of premiums before taxes, which also reduces the employer's payroll taxes.
Employers with 50 or more full-time equivalent employees must offer affordable, minimum-value coverage or risk IRS penalties, and must file annual reporting forms.
New-hire waiting periods can't exceed 90 days. When employees leave, federal COBRA or Cal-COBRA may let them keep coverage for a period.
FAQ
Businesses with 1–100 employees buy in the California small group market. You generally need at least one eligible employee who isn't the owner or the owner's spouse.
Most carriers require the business to pay at least 50% of the employee-only premium. Contributing toward dependents is optional.
Yes. Groups that meet the carrier's contribution and participation rules can start coverage in any month. Groups that don't can still enroll between November 15 and December 15 each year.
Not if you have fewer than 50 full-time equivalent employees. Employers with 50 or more must offer affordable, minimum-value coverage or risk IRS penalties.
Usually not. Employees who decline because they're covered elsewhere, such as through a spouse's plan or Medi-Cal, are typically excluded from the participation count.
No. Small group premiums are the same whether you buy through a broker or directly from the carrier, and brokers are paid by the carrier.
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