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Likely Health Insurance Rate Changes for CA Small Businesses in 2016

Many small business owners  in California voted for an early renewal option in 2013 to remain on their old group health plans, the so called “grandmother rule”. Governor Jerry Brown signed  the bill (SB 1446) into law that gave businesses with fewer than 50 employees an extra year to obtain Affordable Care Act (ACA) compliant group health coverage. At the end of 2015 approx 70 % of all small business have to sign up to the new ACA compliant health care group plans, hereby many experts foresee significant rate increases for these small business in 2016 .

Under the Affordable Care Act, all health care plans have to offer 10 essential benefits, from maternity care to hospitalization and prescription drugs. Small Group Health Plans that do not offer these 10 requirements are to be eliminated by the end of 2015 from the small group healthcare business industry.  The Affordable Care Act prohibits charging small group health plans based on employees health. That means that companies who had healthy employees might have had lower premiums with the old plans than with the Affordable Care Act plans. However companies with a less healthy staff might profit by the new ACA health plans, as employees health status does not play a role.

One thing is for sure: in the last quarter of 2015 there will be a bottle neck of obtaining  new health plans for 2016, as many small business will transition into the ACA compliant health care plans.

In order for a small business to prepare for this transition it is very helpful to check if all census data is accurate. We hope that the 2016 health care premiums are available in September/October so that there will be enough time to transition into the new ACA compliant health plans. There are many different choices to find affordable health insurance for small business  such as the state exchange, Shop by Covered California, or the private exchange California Choice. There are also traditional health plan carriers from Kaiser, Anthem, Blue Shield, United Health Care and Aetna.

For a free health quote for a small business in California please contact Solid Health Insurance Services.

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