A recent update to the Covered California SHOP (Small Employer Health Options Program) will now allow businesses to offer two different levels of benefit packages. Currently, employers can only offer one level of benefits with many different plan options under that specified level/tier.
California is trying to make it easier for employees to choose a plan that fits their needs by giving more options to their employer.
So how does this change affect a small business?
- Employer now has the option to select two contiguous levels of benefits
- Employer can specifies their contribution level
- Employees have the option to choose a benefit plan from either of the two tiers
- Employer contribution is the same across all benefits packages so if an employee chooses a plan on a lower tier that costs less than the employer contribution, the remaining employer contribution can be allocated towards health care premiums or family coverage
Why is California making this change?
California’s primary goal is to get new individuals enrolled on the healthcare exchange and they have paid less attention to helping small businesses at the initial launch of the Covered California program. According to the Sacramento Business Journal, only 1,519 small business employers enrolled in SHOP signing up about 7,432 employees with 3,272 dependents. These numbers indicate that there are only about 10,704 people enrolled in the program. These numbers are only a minute representation of the numbers California hopes to achieve next open enrollment period. This year they are paying more attention into the small business sector and focusing more efforts onto how they can help get small employers and their employees covered through the exchange.