Covered California Posts Details, Premium Rates for SHOP Plans

On Thursday, Covered California released plan details and premium rates for the exchange's Small Business Health Options Program, the Sacramento Business Journal reports (Arns, Sacramento Business Journal, 8/1).

Background on SHOP

Under the Affordable Care Act, the Small Business Health Options Program allows small businesses to offer either a single plan to all of their workers or select a benefit level and allow employees to choose among several plans offered at that level (California Healthline, 7/22).

Details of Plan Options

Covered California officials said there are six insurers that will offer SHOP plans:

  • Blue Shield of California;
  • Chinese Community Health Plan;
  • Health Net;
  • Kaiser Permanente;
  • Sharp Health Plan; and
  • Western Health Advantage.

The plans will include both HMOs and PPOs.

Each insurer will offer four levels of coverage:

  • Platinum, which offers the most comprehensive coverage;
  • Gold;
  • Silver; and
  • Bronze, which offers the least comprehensive coverage.

Employers will select a level of coverage, and workers will be able to choose from plans offered within that tier.

Details of Premiums

Covered California officials expect premium rates in most of the state's populous counties to be significantly lower than those charged by insurers for similar health plans offered currently.

Average premiums for 40-year-old workers enrolled in silver-level plans are slated to decrease by:

  • 28% in San Francisco County
  • 17% in southern Los Angeles County;
  • 13% in northern Los Angeles County (Lifsher, Los Angeles Times, 8/1);
  • 12% in San Diego County;
  • 12% in Alameda County; and
  • 2% in Sacramento County (Covered California release, 8/1).

Covered California officials said that premiums for SHOP plans "are generally comparable to 2013 small-group market rates and, in some cases, can save small businesses money on their premiums" (Sacramento Business Journal, 8/1).

Reaction

Scott Hauge -- an insurance broker in San Francisco and president of Small Business California -- said the small business exchange "clearly will be a major competitor" in the state (Los Angeles Times, 8/1).

Hauge said that the rates are "a good first step" toward controlling costs, adding that they add "competition to the market, and any time you add competition, it's a positive."

However, Bill Hammett -- an insurance broker in San Diego -- said any difference between rates for plans currently available and those offered through the exchange might be exaggerated. "I have no ax to grind with the [small business] exchange, but I just don't think it's going to be the huge splash they were hoping for," he said.

Hammett did acknowledge that tax credits available through the exchange provide "a clear advantage" for businesses (Sisson, U-T San Diego, 8/1).

John Arensmeyer -- founder and CEO of Small Business Majority -- said that there still could be "situations where it's better for the employees to go to the individual exchange and get subsidies" (Los Angeles Times, 8/1).

Broadcast Coverage

Headlines and links to broadcast coverage of the small business exchange rates are provided below.

Therese Meuel
If you go to CoveredCA.com it describes the tax credits and how much they are. Basically if you pay 50% of your emolyees insurance cost and have less than 25 employees you can get between 35% and 50% of the cost back as a tax credit. If you're a non profit it is less. I recommend you go to coveredCA.com and also smallbusinessmajority.com. They both have great information.
James Roache PharmD
Interesting tid-bit of information. Is anyone planning to publish rates, by insurer, for the other 75% of California? Anyone know the tax credit basis calculation for the SHOP purchasers?

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